Unisys Corporation (UIS) Earnings Call Transcript & Summary

Ladies and gentlemen, please welcome the Vice President of Investor Relations, your host, Ms. Michaela Pewarski.

Welcome. Thank you for joining us at our Unisys 2023 Investor Day. We are also excited to share the content we have prepared today and this is the third day of 3 days of getting our executives together to talk about our innovation, market opportunities, differentiation, how we're helping clients unlock value with data analytics and AI. And yesterday, we spent some time with the analysts and advisers who advise our clients on solutions providers. And we were joined by some of our clients, including global executives from Dell, Unilever, Elekta and Integer, which is one of our newer clients in the mid-market. And the energy and excitement was just palpable. So I'm really excited to share that with you today. So let me just quickly walk through the structure of today. First, you'll hear from our CEO, Peter Altabef. Peter will talk about the vision, the market backdrop and some of our financial objectives. Then I'll pass it off to Mike our President and COO, who is going to talk you through our strategy for growth and gross margin improvement. After that, you'll hear from some of the general managers of our business units. First will be Manju, from cloud applications and infrastructure solutions, then Joel and Alan will speak about digital workplace solutions. Then we'll have a quick break. And when we come back from break, you'll hear from Chris on enterprise computing solutions, Christine Wenzel and Lisa Madion on our go-to-market and then Deb will wrap up the presentations with the financial discussion. I would just say that our business leaders who are here and going to be talking to you today will be focusing a lot on our next-gen solutions. And Chris, who is the Managing Director of ECS, he'll also be talking about next-gen solutions, but we'll spend some time on what we call L&S as well. All Q&A is going to happen at the end. So please hold your questions. If you prefer to put your questions in through the chat, which those who are joining us virtually can utilize as well. there's a QR code on the tables in front of you where you can access the chat portal. And so before we begin, and I pass it off to Peter, I'll just quickly touch on our safe harbors and bear with me while I read this. Today's event contains estimates and other forward-looking statements within the meaning of the securities laws. Please note current expectations, assumptions and beliefs forming the basis of our forward-looking statements include factors beyond our ability to control or estimate with precision. This could cause results to material -- materially differ from our expectations. These items can also be found in the presentation materials in Form 8-K that we filed this morning as well as our most recent 10-K and 10-Q SEC filings by including this statement, we do not assume any obligation to review or revise any of the forward-looking statements referenced today in light of future events. We'll also be referencing non-GAAP financial metrics which we believe provide a more complete understanding of our financial performance. These are not intended to be a substitute for GAAP, as you know, and reconciliations are in the back of the presentation on the website. And also can be accessed through the portal that you can get to through the QR code. There's also a presentation speaker bios on that platform as well. So that's it for logistics. I'm going to pass it off to Peter.

Okay. Thanks, everybody. Thank you for being here in person and also via the web. So one of the discussions we're going to have, which you will see is Joel Raper and Alan Shen will talk about digital workplace. We're very proud of our digital workplace team. We're one of the few companies that has actually a dedicated, separate digital workplace organization and a digital workplace P&L. So you're going to see all of that. And we do great work there. It doesn't make us smarter about everything. So one of the digital workplace sort of things, obviously, is hybrid workspace, remote workspace, in-person and everybody here knows that's like changing weekly, right? Everybody is saying, come to work, don't come to work, people have all different views. We thought that yesterday, when we had the industry version of this conference, we would have most of the attendees remote and some of them would actually come to New York to do it in-person. The reality is the vast majority came in-person, and we hit some remote. Today, it's the reverse. So I want to thank each of you who attended in-person as an investor. We actually have many more investors on the web than we have in-person, which I just goes to show you, if anybody tells you they really understand they don't really understand. At least we don't. But I do want to spend a few minutes giving you at least our point of view, if not understanding about the market and how we fit into the market and where we think that market is going. Okay. So first of all, a couple of quick takeaways from this slide, it's a big market. It's a -- the market that we're in talking about solutions and we manage solutions, we provide solutions, is about $1 trillion right now, with the T, and that is expected to grow about 11% over the next 3 years, which weigh out strips growth in most other markets and certainly more than the economies in general. So the big takeaway here, it's a big market, and it's growing. So what's behind it? What are the tailwinds that are really pushing that market? Well, people are people, and they understand when they read the newspaper virtually or in-person, mostly virtually, what the big items of the day are. And there are some big items that don't affect business. But the big items of the day that affect business basically come down to 3 categories, and we read it every single day, right? What are those 3 categories? Well, one of those categories is what people refer to now as artificial intelligence and specifically generative artificial intelligence. It's a big deal because it is a big deal. It's new. It's generative AI has been around really in that way only for the past 6 months, although it has been in development since 2017 kind of sort of. But it hasn't really been unleashed. Artificial intelligence has been around for at least 10 years. And the firms that have done a lot of work on that have a big leg up in thinking about how to use generative artificial intelligence. You'll hear from some of our folks, we have been active in the artificial intelligence space for at least 12 years. But the degenerative space is actually quite interesting, and every one of our speakers will touch it, okay? So I'm not going to get into too much detail right now other than to say, it's one of the big things. You see all the time. So what are the other 2? Well, the second is cybersecurity. Whether it is [ nation states ], whether it is ransomware attacks, whether it is critical infrastructure under siege, cybersecurity is, frankly, is and will remain a very big deal. Unisys is, I would say, extraordinarily well positioned to protect our clients because of the way we have approached cybersecurity in our offerings. We have been talking at least for the past 7 years about building cybersecurity into each of our offerings. So it's a very important part of what we do. We do some cybersecurity consulting as well. But the majority of our cybersecurity work is actually built into all of our offerings. That's the second thing you hear about all the time. So what is the third thing you hear about all the time? I already talked about it. It's the workplace. It's -- are we going to ask people to come in, no days, 2 days, 3 days, 5 days. And how does that affect the way people work? How does that affect efficiency. And there, you will hear from Joel and Alan. Again, we have had a dedicated team on this now for 7 years that is really focused on all of the aspects of how companies interact with their employees. We call the people who work at our company associates. People have different terms for it, but they are the employees of the company. We know that space very well. Notice that predates COVID. So how you interact with your employees isn't based off COVID. It's not even based off whether you're remote or working at the office. Because most of our clients are international companies. So there, by definition, working with people in other locations. But I think you'll be really interested in our approach to that space. So 3 big tailwinds in a big market. And what we've done here on the slide is just talk about some of the spaces that we play some of the markets that are accessible to us, and you can see pretty dramatic growth rates. So as you hear us today, we're not going to take those growth rates. We're not assuming that. That doesn't mean that we don't want to fully participate. But we want to make sure in giving you a view of the market, we're being careful. And so I hope that you will see that over the course of the day. Okay. This is a bit of an old-fashioned slide actually. This is one of those word slides that we're all used to seeing because they show like how often words show up. In a generative IT world, there -- the technology has advanced pretty far beyond this, but it's still relevant. So what about this really affects the way we think about the business? You will hear today from Chris and from Lisa, our changing go-to-market. And our go-to-market is evolving, and it is important because we want to make sure our existing clients are not only happy, but we grow with them, and we want to attract new clients. And the biggest takeaway -- actually, 2 of them from this is, number one, the role of the Chief Information Officer. So the Chief Information Officer used to be for most of the clients -- most of our companies, a key client still is. But that Chief Information Officer is almost a coordinator now. You'll see the Chief Information Security Officer, who doesn't always report to the CIO. You'll see the Head of HR, you'll see the Head of Sales. You'll see the Chief Financial Officer. You'll see the Chief Executive Officers. We now have interplay with each of these because part of our value proposition is not only to cut costs, but is to increase the revenue and profitability of our company. That isn't to say the Chief Information Officers is not an important role. I'll get to one of the reasons they're important in a second. But it's not the only person. So as we have changed our go-to market, we have really broadened the people that we interact with in terms of the way we approach our clients. What has been really interesting about the Chief Information Officer and about our industry in general, is it went through kind of a dip a few years ago. And it went through a bit of a dip at least in investor interest, when people began to think, do I really need solution developers? Do I need solution integrators? Do I need people in our space? Can't companies just do it themselves? Because the original value proposition for our industry was better, faster, cheaper. And people realize, well, if I can spool up a virtual AWS server, myself, what do I need these folks for. And if I can contract with Salesforce by pulling out my credit card and just getting a Salesforce implementation because I'm a really good salesperson and I want to keep track of stuff, what do I need these people for? And our prime clients, the CIOs were kind of under siege as well because it was like they were losing control of their environment. That is, to some extent, less true now. And companies like ours are more, if you will, in demand than we used to be because CIOs are seen a little differently. So what do I mean by that? Yes, it's true. Anybody can spool up a virtual server on AWS. And it's true, you can start doing that. You can connect it to your phone or your computer, which connects it to your work network and all of a sudden, you've created a cyber security nightmare for your company, right? And if you don't put the protections in, you have created a window into your company. Well, the first few times that started to happen, everybody said we can't allow that. Similarly, on Salesforce, yes, you can spool it up. But CIOs kind of figured out, well, whether it's Salesforce or ServiceNow, there's real value here. Why don't we bring that into the corporate world and do it better, cheaper, because I can get better prices if I license it at an enterprise level. So slowly, the CIO departments began, whether it's because of cybersecurity or economics, to kind of take back a little bit of the portfolio. But then all of a sudden, new stuff happened, right? You had AI, you had more cybersecurity issues. And it got more complicated, right? The world is a much more complicated place than it used to be. There are very few individuals. And in fact, there are very few companies that feel confident they can deal with generative AI, or AI or advanced data analytics or large language models themselves, right? So they are looking for expert help. They're looking for organizations to help them. Same is true for cybersecurity. So our business, if you will, that industry with $1 trillion of revenue, is actually having a moment because everybody is kind of realizing that life is more complicated than it was a few years ago. The other part of the moment, and you'll hear about this a little bit, is interesting because it kind of -- it's more of a talent search. So even though we have gone from last year where there were 600,000 empty cybersecurity jobs in the U.S. to -- there's probably fewer of those now because the demand has subsided a little bit. There is still a talent search for the people who are most in demand. And you can work for a company and I'll be your only client or you can work for a company like ours, where you'll have multiple clients, and we'll be part of a bigger team, and we will have a career. So we actually think that in terms of recruiting, we do recruiting of this kind of talent for a business. It's what we do. And we think we have access to more people and more availability than a typical client does. And so do the clients. So that means that even just getting talent becomes a real advantage for companies in our industry. So that's a good thing. Let's talk for a minute about what we have achieved in the last couple of years. The first thing we did was we started with our solutions. We looked at every single solution we have. We looked at every business unit, we it to come on the whole. We said, okay, let's do an analysis of which things are going to propel us in the future and which things are kind of like treading water. We kind of came up into 3 categories. One category that you will see is license and support. Well, it's certainly not treading water. It's a very big part of what we do. But it is inherently lumpy depending on different cycles there. So we put that aside. We spend a lot of money on it. It's very important. You'll hear Chris Arrasmith will talk about it. Then we talked about the rest of the company. And we kind of divided into what Michaela has already talked about, what we call next-generation solutions and what we call traditional business. Traditional business is good business. It's getting better. It's getting more profitable. But it's not the growth engine. The growth engine for the company is what we call next-generation business. So you will see us over the course of the next several hours, really focus on that next-generation business. And what we did with each of those as we did a build, buy, partner analysis. So what did we think that we needed to really fully compete or be better? And did we think we could grow it organically? Did we think we needed to buy it? Or did we think we needed to partner? We took a pretty honest view of ourselves, I think, and we decided that there were some areas we came up short. We came up to areas short in our cloud applications and infrastructure business. We came up short in our digital workplace business. So we looked hard at over 200, 225 companies and we bought several of them over the last couple of years. Now the interesting thing about us, is we bought those companies and we brought those people in, not because we needed the revenue but because we needed their talent. We needed their capabilities. We needed their attitude. And we have worked really hard to make sure that, that attitude that we acquired hasn't left us. So you're going to see today, after Mike speaks, 3 -- our 3 segments. And you're going to see the leaders of those 3 segments speak. And when you see those 3 segment leaders, keep in mind, 2 of those segment leaders came from those 3 acquisitions. So we're not just bringing in people as part of acquisitions. We're making them the leaders of our company. That's a really good way to entice people to join us, but it also is really important in terms of the way we want to move the company forward. I talked about acquisitions. We will hear from Chris and from Lisa a bit the way we are approaching our go-to-market. And the 2 takeaways for me not to give away what they're about to say, I've already covered 1 of them. We're really approaching clients differently. And we're also approaching partners differently, and you'll hear about that from them. And then finally, transform the brand. Teresa Poggenpohl is here and can answer questions for you if you have them about that question. About 1.5 years before our November launch. Teresa had joined the company and really started to work with her team to create a new brand. you can see that everywhere as you're meeting our team. It's in our visuals, it's in our themes. It's really important to us. We launched it in November. And since November, you can take a lot of different measurements. The one I like is how many clients and prospects visit our website. because our website is a window into research about the company. It's a window into our solutions. So since the launch in November, the number of clients or prospects visiting our website on a monthly basis, has increased 4x. It's 400%, what it was before. That's pretty cool. You will see this slide later. So Deb is going to cover this slide. So I will only speak to it pretty quickly. But I do think you will find us in a large market. I've already talked about our NextGen Solutions. I want to spend a minute about highly recurring revenue and about our quality client base. There are people out there in the investor world who think that we're in a more bullish state. There are some who think we're in a more bearish state. Most of what I've talked about today has been addressing the bullish market. Let's talk about the bearish market, okay? So in the bearish market, whether those people believe we're in a recession, we're in a quiet recession, we're close to a recession. There are people out there who feel very cautious about not only our market but all of the markets. Well, how do they think about our company if they're at that mindset? Yes, they love the next-generation stuff, but things are not quite settled out there in the world. 82% of our revenue, 82% comes from recurring contracts or recurring streams of revenue. And only 18% is what we call project work. That's a high percentage. And then if we look at our top 50 clients, which include some clients that are 2 years or 3 years or 4 years old, right? Some new clients. But if we look at an average of our top 50 clients, we have an average tenure with those top 50 clients of more than 20 years. So we are a company that lands and stays, and we really develop very, very deep relationships with those clients. So whether you have a bull attitude or a bear attitude, we think we're an interesting company for you. And the last item, and Deb will really cover this among our speakers, although Mike will do it just a little bit, we'll talk about our strong financial management. Numbers go, numbers come, profitability comes and goes, different solutions come and go. We'll get into the exact numbers as you hear the day, but that's not the point I want to make with you. The point I want to make with you is that word management. We manage it hard. We look at cash flow hard. We look at expected contributions to things like pensions hard. We look at our costs hard. We look at SG&A hard. We make adjustments, we make changes, but we actively manage these things. It's not an afterthought here, okay? So -- my last slide, what are the things that you will hear about over the next several hours. You'll hear about our long-term targets. Michaela has already spoken to that. You'll hear about our growth strategy, where we intend to take the company. You'll hear about quite a few client examples. We are -- the things you will hear us talk about, we're doing today. And so we want to make sure you get client examples about what we're actually doing. We'll provide you those. You'll hear about efficiencies. You'll hear about that cost management. You'll hear about the license and support because even though we talk about license and support and ex license and support, it doesn't mean the license support is unimportant. It's just lumpy. And then finally, among our different cost elements, you'll hear about the pension and how we're managing that. So we think it's a full day. As I said, you'll hear from Mike, you'll hear from Deb and Michaela and I, but you hear from us frequently. So we're really going to highlight today, and most of the time today is going to be members of the executive team that you don't see all the time that you don't hear about all the time, but they're critically important to the company that you're investing in. And so we think giving you some insight into who they are and how they're approaching our business is really important. So that said, I'm actually going to let Mike come up if you will join me, Mike. Mike Thomson is our President and Chief Operating Officer. He's going to go a lot deeper into our strategy.

Thank you Peter. So thank you all for coming. Welcome. It's great to actually see many of you in person. I feel like I've been talking to a [ one in ] square with most of you for several years now. So it's great to have the opportunity to talk to you today. Look, my job for today's session is really about setting up the session for the rest of my colleagues. I think it's really important that they bring to life for you what we do on a regular basis and really illustrate our NextGen Solutions. And so that's what I'm going to attempt to do is really get you set up so that we can have that conversation. I thought before we get into the specifics there, though, just to kind of, ground you all on some of the statistics about our company, and level set, I thought it'd be a good slide here just to have some of that dialogue. You can see the number of associates that we have in the company. You get a view into the number of geographies that we cover. We are -- take away here is that we've got global reach for sure. The thing that's not on the slide that I think is an important element for us to really talk about is, we've been doing business in this space or in general for about 150 years. So when you get a warranty from Unisys, it actually means something, right? We are here for the long haul. Peter mentioned briefly the level of intimacy that we have with our clients. You're going to hear that a lot today as well. I think that's an important part of the story. We're a small enough company to be nimble but we're large enough to service the largest companies in the world, state and local governments. We talk about foreign governments and public sectors. So we have a pretty deep experience in around the world and in many verticals. $2 billion in revenue, just about NPS scores that are a little over 20 points higher than the industry averages. You see our renewal rate here. We've talked about that. Peter talked a little bit about the amount of recurring revenue that comes out of that renewal rate, and we're pretty proud of that. And you can see the types of institutions that we support on a regular basis. So hopefully, it gives you a pretty good sense of where we are and what we do. What you see on the slide here is really the 4 business units and the way we go to market. And I think for the most part, you all are pretty familiar with them. And you're going to see and hear from the business unit leaders for each 1 of these. And I think they're going to give you some real insight to the things that we're doing. We're all acutely aware at the pace at which technology is changing. The functionality continues to evolve. The stack continues to evolve. So it's critically important that when you partner with a company like ours that you understand that we've got the debt to apply that technology in every level of the stack. And I think you'll see that throughout the day. When we think about the elements of these business units that are most important, we're going to talk quite a bit about the NextGen Solutions. That is the growth aspect of the company, and I'll touch on that a little bit, and I think you're going to see from really all of the business unit leaders as they come up, and we'll make sure we hit that home for you all. I thought it'd be at least important that you can put a face with a name and get a sense of the leadership team from the company. It's a very diverse team. I will tell you that I'm proud and honored to work with all of these folks. There are some real subject matter experts across the board really in every position. It's taken us a little while to get this team together. But again, really proud of them. And I think that in the long run, and after you hear from them, you're going to understand why we've selected these individuals. And we think they're the right team to propel this company going forward. Wanted to just talk briefly, we've been talking about the analysts that we've spoken with over the last couple of days, just to put in front of you some of the things that they're saying about us, how they feel about how we're positioned in the marketplace, critical elements that we deliver, who we compete with those types of things. This is actually an important element to our strategy. You've heard us talk for a while about market awareness. It's really important that from a point of the spear perspective that the analysts that we work with open that door for us in the construct of working with third-party advisers, working with prospective clients and this is an area that is critical to our success. It's a group that we have a really good working relationship with. And it's a group that we continue to educate. And we had, again, a couple of good day sessions with them, and we expect that we'll continue to move forward in the views of those analysts and ultimately gets us invited to additional RFPs and the such. Operational recognition, so it's nice to talk to the analysts and talk to talk, but it's actually more important to walk the walk and actually deliver for our clients. And I think this gives you a little bit of example of some recent accolades that we've gotten, some of our partnerships. I think what's more important is are the stories that you're going to hear from the various BU leaders that come up through the day. That's actually the types of things that we're doing for our clients, and that's actually a little bit more important than what we say we're going to do, it's actually about what we do. Thought I would just touch on ESG. It's a topic, obviously, that comes up in every discussion like this. From our point of view, we actually just published a couple of days ago, our 2022 sustainability report. For all of the people that grade these, you can see that we're basically at the top of the grading scale across the board. And continue to push forward our Net Zero goal by 2030 is in play, and you'll see that in the sustainability report we just put out. One thing that I do want to mention about ESG in general, we actually have a pretty unique offering in ESG, sits in one of our NextGen Solutions in the micro markets. That ESG offering is basically threefold. The main component of the offering is managing the clients' ecosystem and understanding the impact of that ecosystem has on our clients' ESG reporting. The second element of that offering is really a single pane of glass dashboard that pulls in all ESG components, and it really gives the viewpoint or a dynamic viewpoint on the ESG reporting for our client base. And an interesting element that we have is the third component of that ESG offering. And that's really about external sentiment, right? So it's bringing in an external view as to what people think about our clients' ESG persona and how that aligns to their own thoughts. So that's a pretty unique offering in the marketplace. We've been getting some incredible feedback on it and looking forward to seeing what it can do for growing the company. I'm going to switch gears and talk a little bit about our strategy. I wanted to start with this quote. I really like this quote for 2 reasons. Number one, it really mentions focus. It is a hugely important element of any strategy that we have focus. And I think we're pretty good at the company around ensuring that we stay focused on what's important not only to our success, but obviously for our stakeholders' point of view. The other thing is the dogged execution, right? Our strategy is only good if you're staying on strategy and staying on point. And I've had some discussions with some of you even already earlier today around things that we've talked about in 2021 and where we're at today. And I think we've been pretty consistent in that strategic view. And I think we're continuing to march down that path. And so that's something I think is important to stay with. There's a couple of really core elements of the strategy that I want to talk to. Peter talked to a little bit already. It's really about the addressable market. When you look at our next-gen solutions, you're going to get a viewpoint into how those NextGen Solutions tie into the addressable market. And that's obviously a big part of this discussion here. The second point of that is really about our solutions. We've been working on the solutions portfolio for some time. I'm really proud of what we've done, and I'll get into some of the specifics around where we're at with our platforms and where we're taking those solutions. Talking about how we go to market, we're going to dive into that a bit. I'm going to have some of that. Some of the team is going to talk about the go-to-market as well. It is primarily a land-and-expand strategy, at least in the early stages of our longer-term plan. Heavier on the expand side, heavier on the growth within the wallet share of our existing client base. And then the land driving some of that or propelling some of that forward. The other aspect of this is really about margin expansion, right? Margin expansion from our point of view is always the precursor to generation of additional cash. Margin expansion really comes from a couple of vectors from our point of view. One is really that land on the NextGen Solutions that have a higher margin profile. And clearly, that's driving expansion margins throughout the business. But the other side of that is really working on the cost equation, cost of delivery. We're going to talk about some of the things that we're doing from a cost perspective. And really taking that all the way through operational excellence, which takes us really beneath the gross margin level and all the way down to operating profit, and Deb is going to cover a host of that in her dialogue as well. So you've heard a whole bunch already about next-gen solutions. I know many of you follow us pretty closely and understand what they are. But I thought I would illustrate it here, I'm certainly not going to drain the slide with the elements of the NextGen Solutions. But I would like you to listen for when Manju and team are coming up, we're talking about digital platforms and applications. And Joel and Alan will be, will be talking about modern solutions. Just really making sure that we're seeing that these things are tied together. We're going to talk about them individually so that we can illustrate for you all what we're doing. But just know that when we talk about the platforms and some of the other elements of our NextGen Solutions, we are leveraging those across the piece. You'll certainly see that in the go-to-market as well keeping our commercial organization kind of on the umbrella side of this. I wanted to talk a little bit about the current mix of our NextGen Solutions and our traditional solutions, and we're going to talk about how they tie in to the market. Before I do, though, I think you'll note under the 35% there, the ex-L&S, and Peter alluded to it already. So when we talk about our company and one of the things that we hope that we can continue to work together on condition folks to look at, we'd like you to look at the company in 2 ways. One is this way, NextGen Solutions and traditional, and we'll talk about both components of that. The other is L&S and ex-L&S. And that's really an important bifurcation because, as Peter mentioned, the L&S or license and support component of our business is lumpy and it causes a lot of oscillation that people don't understand. And the knee-jerk reaction to the movement of that from a financial market perspective is actually pretty daring at times even know that we have a good sense of what that looks like. So by excluding L&S from the results and looking at everything ex-L&S, we think we can really focus you all on what the real growth vectors are and how you should manage and monitor our business. As Peter also mentioned, the L&S business is a great business, right? A 3-year or 5-year CAGR on the L&S business is about $360 million per annum. It's mid-60s, high 60 margin percent business, extremely steady, extremely reliable underpinning. It's predominantly are the ClearPath Forward operating system as well as the support for that system. It's extremely secure and it's extremely reliable. So it is a great piece of business for us. It's a generation of profit for sure, has been for decades. We hope it will be continuing that way for decades. But the movement between quarters presents problems in the financial model. So again, we're trying to adjust the aperture so that we're really looking at the business in the way you see here. The current mix of the business in '22 was about 35% as the NextGen Solutions and the remaining of the business was traditional. We're looking to move that about 3 points in '23, moving that to about 38%. Over the course of the next 3 years through 2025, we're looking to move that between 35% and 45%. So a 10% pickup in that time frame. And then by 2028, we're expecting the NextGen Solutions to be the lion's share of the business, just to give you a sense of how that is modeling out and what our expectations are for the growth in that NextGen business. And again, I think maybe tying in again to a point that Peter made earlier, our expectations of this is significantly below what you see in some of the market growth elements. So we're not taking a super aggressive approach here. We're really trying to I won't say be conservative, but we want to make sure that we can deliver on the types of things that we're projecting. Peter gave you a little view into this. This is a more detailed view of our view of the market and how it ties into the NextGen Solutions. And you can see that if we look at the current market, it's about $600 billion for just our NextGen Solutions. And it's really doubling over the course of the next 3 years. That portion grows to about $1.2 trillion, $1.3 trillion. So there's certainly a big market opportunity for us here to continue to grow our business. And it really validates, I think, the solutions that we're actually developing and delivering to clients today, how we think they can grow and you can look in the middle there on the CAGRs to get a sense of how each one of those elements are moving. Just a little view into what I was just sharing. You can see the NextGen annual growth rate that we're embedding in our plan is this 10% to 15% annual growth rate. And you can see the mix over the next couple of years. Well, one thing I would note, and it's a little different than it was even a couple of years ago. The traditional side of that business is also growing. And that's an important element to us because we've always viewed the traditional side of that business to be a gateway into NextGen. And so the fact that, that's growing and the fact that we have this land and expand strategy is also helpful to our overall growth rates. I talked a little bit about some of the markets that we're looking at. So traditionally, as you all know, we've been really focused on large commercial financial service and public sector market. We've almost been exclusively in that market. This is an interesting opportunity for us, we think, to really focusing on our growth in new logo. The mid-market, as we define the mid-market is between companies with between $2 billion and $5 billion of revenue. There are other demographics in there. that we like to think about. But it's a market that has some very interesting buying characteristics that we think lend itself to our ability to penetrate here. Number one, 1 of the biggest things in the mid-market as far as the buying power is concerned is really about client intimacy and being tied into that client base. And that's something we've got 150 years' worth of experience on. So we really feel like that is one of the biggest buying attributes in that market. And again, I think it's important to us. We also talked a little bit about the war on talent. Companies of this size just can't keep up with the talent they need to navigate the complexity of the IT infrastructure. And so another opportunity for us to penetrate this market in a bigger way. And I think lastly and not on the slide here, but if you look at the competitors in this space, is very different than the competitors that we play against today. In this space, we're actually one of the larger providers. We're one of the few providers that actually have global reach. And we're one of the few providers that can deliver on the entire IT stack for those mid-market clients. So we think those elements from a demographic perspective speak pretty highly and it's an area that we're targeting. You can see in our first kind of value into this, we're looking at just the U.S. clients. That doesn't mean we're only staying in the U.S., but we really think we can pick up this whole market embedded in our current digital marketing footprint without having to add much of anything from a cost point of view. So it's something a little new to us, but we think there's some real opportunity there to support new logo growth, and then, obviously, land and expand. We talked in the opening about one of those clients yesterday was on our panel in Integer. And so we've seen it really play out in real life there. We got in with a small opportunity. We're now running basically the bulk of their infrastructure. We're moving into the DWS realm on that client and we've got a pretty nice pipeline sitting for continual growth in that as well. Peter touched briefly on the solution stack. And really, I want to talk about it through maybe a slightly different lens. We look at our elements from a platform point of view. And we really try to leverage the integration and the innovation that's happening at every layer of the stack. So we're taking advantage of the innovation that's happening with our partner network. We're going deep into certain partners, right? We're not trying to be everything to everyone, but we want to make sure that the partners we pick are either folks in this space now that have the best-of-breed or folks that are penetrating that space that we can get in early with and really drive some value. The key to it from our point of view is having that as the underpinning, having variety that we can give to our clients when we talk about the total solution portfolio. Having the ability to orchestrate and via APIs and the like kind of embed that into a full-service solution and then making sure that we're sharing that amongst our business units when we talk about the internal fabric that makes these things up about the governance. We've got an internal group for our automation hub and we share and those elements of the library and the stack from an automation perspective. And we also have an innovation group centralized that kind of goes across all of these. So we think it's a really important aspect of our ability to, a, share that amongst ourselves, and b, give the leverage to that to our clients so that they get a lot of variety in what we're bringing to the market, and we are able to stay on the cutting edge as well. Peter talked a little bit about AI, what we'll be talking about if we're not talking about AI right now. You can see here we've been doing this for years in our business. We've got already 34 existing solutions between all of the business units and how they're using AI, generative AI, quantum compute. You're going to hear from the business unit leaders today, how that impacts their business, what we're doing today and how we're using that in clients in real-life situations. It's important for us that we're not innovating for innovation's sake, right? It's really about purposeful innovation that shows value to clients and applying that in today's market. And I think that's going to come through loud and clear when you see many of the client examples that we're talking about. We have a pretty interesting take on quantum that you'll see as well. Land and expand, we've chatted about already. Again, super important. Peter mentioned that the brand kind of came into play at a tail end of last year. We're just starting to see that really kick in. The tie-in between our sales and marketing team has been great. The tie-in to the solutions team has been great. We really feel like we've got the right configuration of that and growing that as we go. I mean my spin on this is simply the saying the proof is in the pudding for me, the proof is in the pipeline. We'll see as the pipeline grows, how effective that marketing is. But we've got a great relationship with the marketing group. Teresa and team have done a wonderful job, put together a multilayered program, a multiyear program. We have specific programs targeted to the industry. Specific programs targeted to the market. We've got programs targeted at the point of spear to mid-market to specific must-win clients. So it's really pretty well orchestrated, and again, pretty much at the early stages of that. I'm going to share a couple of statistics on that. Peter mentioned the 400% increase here. But when you look at the volume that's going through the website, when you look at the traffic that we're seeing, when you look at the curated content and the time spend on curated content, and you look at the impact that it's having on the pipeline already and some of the lead generation, it's been very positive and very favorable, and we're really excited about what that can bring to the future. I wanted to share just a quick [ NASCAR ] slide that we always see here, right? But it gives you a sense of the types of clients that we're supporting the sense that we're dealing with them on a global basis. We're in every vertical. And when we talk about our existing base to build from, this is the opportunity for our cross-selling. And Chris and Lisa are going to talk a little bit about our cross-selling, and I'm going to share with you some of the TAMs that are available in the cross-selling market as well. So $31 billion of untapped addressable wallet share in the existing client base, right? So we've been -- we closed last year at about 33% penetrated for sales that cross multiple BUs through basically the first quarter. We moved that to about 40%. And but this is the opportunity just in DWS and CA&I for our ability to cross-sell. So you've got an existing base that you've got very happy clients. They have NPS scores above 20 points above industry average, and we have the ability here to penetrate that market with, they're spending those dollars today and they're spending them with someone else, and that's an opportunity for us to continue to grow. What we're looking at from a gross margin point of view over the next couple of years is on average about 150 basis points improvement in gross margin over that couple of year window on a consecutive basis. Deb is going to talk about some of the margin expansion beyond that in SG&A and other areas. When we think about this, it's almost a threefold cost thing. The first is actually the next-gen solutions driving more margin. The other is the actual cost of labor, right? So we have many, many programs going on to support the ability for us to drive down that cost of labor, whether it's the labor marketplace that we're talking about internally, having opportunities for our associate base ensuring that, that labor marketplace is putting the right people in the right place at the right time and at the right level for the job that they're performing. So that's been a pretty dynamic element that we've embedded into our DNA. And again, pretty much at the early stages of that. The other element of gross margin improvement is automation. We've been talking about that as well. The automation hub that's the centralized component of our innovation internally is really geared towards how much labor capacity we can build without having to add people. So part of the model here is, we don't want to be in this -- on the hamster wheel. Every time we add revenue, we've got to add people. So having that automation built, taking out the day-to-day task, creating capacity so that we can grow without adding people. improves our margin quite a bit. And then the rest of that is really around contract management. We put in place recently a kind of global contract management program to ensure that the contracts we signed are standardized and the contract's life cycle, all the way through the renewal is really living up to par. So those are 3 areas that we're using to grow that margin profile outside of the impact of the margin growth through the NextGen Solutions. Just wanted to close out on operational excellence with the things below gross margin. Again, I don't want to steal any thunder here. Deb is going to go through these in detail, but I wanted to just give you a snapshot of, of what that looks like. And ultimately, it's about growing that top line, it's the gross margin improvements and then everything beneath gross margin down to operating profit. Driving us to a higher operating profit and cash flow, right? That's the name of the game, and Deb is going to walk you through that model. So I think with that, I'm going to wrap up, and I'm going to turn it over to Manju, who runs our cloud applications and infrastructure business.

Thanks, Mike. Hello, everyone. Good afternoon. My name is Manju Naglapur. I'm the SVP and the Global GM of cloud applications and infrastructure business unit. I've been in the seat for a year, and I came through an acquisition. The name of the company, for those of you who don't know, was CompuGain. CompuGain was a digital-first, cloud native company. I managed and grew that business for 14 years before I got into Unisys. When we talk about CompuGain, we had the good fortune of working with a number of Fortune 100 enterprises. These were cloud pioneers and there were a lot of good things that we learned out of these businesses where when we talk about multi-cloud foundations, when we talk about digital-first, it's not like we invented it, we had this opportunity of going deep in terms of engineering, engineering talent that we had to get to solve these solutions. I know Peter talked about AI. Everybody is talking about Gen AI for the past, I would say, like 7 and 8 years. We are powering a lot of these financial institutions in terms of surveillance, fraud detection, even when it comes to content intelligence. There are solutions that we are bringing to the table, right? So in the next 20 minutes, what I want to impart when I go through my session is you'll be hearing about how Unisys is advancing in cloud applications, infrastructure and data. That's number one. What opportunities do we see in the market, number two. And how are we meeting these demands in the coming years? And what kind of foundations, what kind of solution portfolio are we are putting together to make sure that we meet these demands? And when we are talking about who we are and what we are doing today, I just talked about the acquisition and even Peter mentioned that there are leaders that they are promoting within Unisys, right? I think this is a very important point. When we think about how we go into looking at business outcomes, we want to bring in this in a fresh perspective. Because deep engineering is really required when you talk about leading the business outcomes because this is what we are going to power across our global client base. When we talk about cloud native and digital-first strategy, this is what we want to do in all of our next-generation solutions because we have to bring this to the market. We want to make sure that we are using the elasticity of the compute to move to the next generation. In-build security, this is going to be an enterprise foundation layer for us in every platform, every solution that we built to make sure that we are meeting the demands for the clients and scaling with advanced platform engineering. We are talking about platform engineering because if there's one takeaway that you want to get out of at least my session is, we are going to be using these solutions, these innovation engineering, these platforms to make sure we are powering the -- powering AI. We are powering multi-cloud platforms, even in terms of applications. I mean, that is a huge deal. I think Peter really brought this up, right? Build, buy, partner. This is the way we are also looking into platforms. There are IPs we have built over a solid in a number of years. But there are -- the base is also increasing within the technology landscape. When this ever-changing technology landscape is moving this fast we are always identifying engineers or engineering companies, which are very forward-looking and we are taking them to the market in terms of integrating a lot of these solutions. And agile and deep engineering expertise across the globe, obviously, through acquisitions, and we are looking for new and fresh talent globally because as we are pivoting into the NextGen Solutions, there is a requirement for talent. But we're also augmenting this particular talent using our platforms because it becomes easier for at least our existing associate labor to really get upskilled faster. And let me talk about market opportunities. What do we see? Because the way we look at it is if you look at these 3 streams, transform accelerate and disrupt, right? So this is based on, I would say, like the digital maturity of the clients. We had a vantage point of looking at our clients, our prospects, talking to a lot of the analysts and advisers globally. We have categorized these streams. When we're talking about transform, think of transform as the establishing the right foundations and ensuring that we realize business value, right? This could be setting up multi-cloud foundations, making sure that you are securing the layers and also rightsizing, rightsizing the cloud foundations and then bringing in financial operations to bear, right? So when we look at this stream of opportunities, it's a very confusing landscape that we see in the market. When -- like with the advent of the cloud, with the global hyperscalers coming into play, central IT has taken a back seat. You could see that the agencies, the business units, the campuses are running faster. They are signing up with either AWS or Azure or what have you. And when you look at this particular stream, the governance is not there. Central IT is having a real problem in terms of security. I think this is where we come in. We see massive opportunities here. We also have this rich legacy of hybrid infrastructure, hybrid managed infrastructure play. We are taking this. We are taking these adjacencies, and we are moving into this multi-cloud platform. So what are the opportunities we see? We are setting up cloud business offices. We are setting up a multi-cloud management layers. Obviously, cloud security comes into play. Financial operations or FinOps as it generally known, DevSecOps is another major area or even observability, which is to monitor constantly to make sure these transformations are working well. Now let me talk about the second stream accelerate. When we look at business outcome through digital capabilities. Digital for us means not just in our applications, it's also data. In terms of the digital, these are modern applications, we are creating. We would be building bespoke applications. We will be modernizing and also maintaining and managing it. It's a huge opportunity. And when you look at this accelerate stream, Think of these -- this client base or the prospect base who already transformed to the cloud, they have an advantage in terms of taking all the digital work stream. They're taking this to market. They have an advantage of moving faster when you compare this to the competition. And we feel like we have a very good play here, be it in a large-scale application development, micro front-end because we have framework that we've already built based on the solutions that we take to the market or monitor digital experiences and digital transformation. And you keep hearing one thing within the advent of the cloud is a purpose-built databases, right? Earlier, it used to be you have a database, you're doing a lot of the heavy-duty engineering at the back end. But with the advent of the hyperscalers, you could have purpose-built databases. It could be graph engineering. If you want to do some social network or it could be some time series database, if you want to look at some time for value, right? And automation first principles of what this stream would be looking for and future work. I think Peter and even Mike touched upon it. When you're talking about upskilling labor, when you need the talent, where these businesses, and also given that we'll be even entering into the mid-market, it's not like they have this massive talent or they would have -- they could afford to bring them in for, let's say, 6 to 8 months or even years, right? I think this is where we come in with the power of our framework and talent really helps, right? And then let's talk about the third stream here disruption. This is where we could enable clients to leapfrog the competition with AI. core AI, applied AI, and generative AI, right? When we talk about it, this is not new to us. Core AI, think of this as the foundational layer. Like when we talk about foundation, it's a cloud foundation, number one. Then you need the data foundation to set this up. And number three, you need the AI foundation. So what is AI foundation? Like you need continuous delivery. You need continuous explainability. You need a continuous like observability. So that when we bring in these models there are streams that are set up, there's security layer that you need. There's data encryption that you need. And when we talk about applied AI, this could be the foundational mods that we take to any business problems. It could be financial problems. It could be in the sector of I would say, public -- in a public sector. We can take some digital citizen service content intelligence that we can take in. So applied AI would work for any business solution, both in the deterministic and also generate AI. And last but not the least, I would say, the past 6 to 8 months, everybody is talking about gen AI. Huge space, huge opportunity. But the opportunity lens that we look at is multifold? So we have a rich legacy of hybrid managed services. So what does this mean to us? If you look at someone who doesn't want to go to the hyperscalers or the cloud, I mean you still need these massive infrastructure play that needs to come in. So obviously, you need experts who can understand, who can manage security. This is a big play for us. And number two, when you think about it, setting up all the cloud foundation, setting up the data foundation, setting up the data encryption layer, access list. I think the list is endless, but we are very good about the opportunities there that is present to us. And I just want to touch upon this. I gave a lot of the opportunity landscape here, but how are we taking this to the market? What's our portfolio, what's our parent solutions that we take to the market here, right? Over the last few years, we made sure we are enhancing our portfolio, and we're making sure that the growth trajectory is within these 5 buckets. And this is where we want to meet the customer demands wherever the journey is, right? And we feel like these solutions will provide that. And when you think of these solutions, one takeaway that I want to give here is -- there are a number of ways to get to a client. That's number one. When you look at these complex use cases it just depends on what we take to the market. When somebody talks about digital transformation, it could be advancing the cloud, migrating it, number one. Number two, you can also make sure that you are building out the modern application in a solutions layer. And that's why we have laid this out this way and when we talk about all the platforms and solutions we bring to the table, we have web solutions that go with every [ child ] solution that you see here. Modern application solutions, this is how we are powering like the enterprise for digital transformation. Number two, data analytics and AI solutions, be it in migration, modernization, engineering, governance, analytics and even the core AI platform that I mentioned it comes into this. Cloud management solutions is to maintain, manage your multi-cloud foundations, platform engineering, and also in a migration and modernization. This is the stream that we use. And cybersecurity solutions, which is a big one for us, and we are making sure that we are taking some wet solutions for this, especially when it comes to attack surface discovery. cyber recovery, where we are also partnering with a major vendor to take that as a part of the solution and obviously manage digital identity. This is a big one as everyone is moving to multi-cloud, having the common access list becomes a big, big, big problem. And then let's talk about hybrid infrastructure solutions. We have the SDNs and also in data center managed services. So leading with industry, if we look at the global clients powered by Unisys innovation, where the particular area I talked about was the industry solutions. If you look at financial institutions, be it in the areas of mortgage, lending, retail, insurance. We have co-created and we're bringing those solutions to bear. Same thing with public sector, powering in a digital citizens in terms of law enforcement, in terms of criminal justice systems, in terms of licensing and permitting. We are building either IPO or we are partnering with a lot of the A players to move into this public sector market. Higher ed. We are in a leading -- leading the chart here in terms of higher ed, especially as it relates to one of the biggest [ out ] educational like institutions, we are working there with multiple campuses, we are pretty much moving everything to the cloud for the next 4 years. And media, high-tech, life sciences, energy, if you look at all these sectors, we are in not just the sectors, we have also more that we are powering globally, right? The important takeaway for us when you look at this particular slide is, when we talk about solutions, when we are modernizing, there are opportunities that we can go into these areas. And the one differentiator here is we are leading with business architecture in SMEs, and we are combining our technologies to like lead to the market. And I think I talked about platforms quite a bit. This is at the core of our innovation engine. If you want scalable, reliable, repeatable solutions, I mean, this is the only way to go. And this CloudForte asset suite, which is our core IP, powers every facet, every layer of digital transformation, multi-cloud transformation, even when we are setting up data foundation to power AI, we will be using the solution innovation factory and the asset suite that we've built out in the areas of cloud, in the areas of application, in the areas of data platform, security for assets discoveries. We are building these solutions within the solution innovation factory. And this is -- these solutions not only have our own core IP, we build and integrate with a lot of our partners. And these -- what does this do to us, right? One, not just differentiating ourselves from the market -- this also gives us the conference to sell, I mean, when Lisa and Chris' team is going out in the market, it becomes so much easier for us to educate the sales guys in terms of what we have in our portfolio. How is it connecting to these platforms and solutions. And this also gives us confidence in terms of delivery. When we're talking about delivering in a new client, when there's a bespoke application, we already have methods, frameworks, accelerators coming from this asset site, which would be really helpful for us. And also then operating at scale, monitoring at scale. So it's a lot of goodness that comes out of this particular innovation. And let's talk about AI just for a few minutes here. I'll promise you, I'll stop talking about AI maybe after giving some, some solution base and the use cases here. But the way we look at AI is particularly, this is our approach, right? This is at least an operating model that came to us after working with a number of progressive clients. If you look at AI frameworks and capabilities, today, you have foundational layer, you have open source layers in terms of the frameworks, right? So we will be taking these foundational models, these tool chains and these capabilities to get to applied AI solutions, especially for the market. And number two, I think I talked about AI core. This is where you would be establishing your cloud foundation, your data foundation, your AI foundation, right, for continuous delivery. This is absolutely required even for encryption. And then on the top layer, you have the applied AI solutions, you can use this for finance, you can use this for sales. Sky's the limit, in terms of what we can do. And just wanted to just give a few -- very few examples, Brent and depth of AI solutions. I know, Chris, you're going to be talking about something in detail in terms of the high tech. If you look at this, we were assisting this particular semiconductor company who does like product assurance for semiconductors. We modernize their applications. But when it came into product assurance and integration, they asked us and then when we were talking to the CIO, the first thing we asked is what are we doing with generative AI, right? So there is like an Azure Code Pilot, they're already in the hyperscalers. They're going to be using this core assist tool to start like working with the client and then building out a proof of value to bring it to bear. So this way, we can at least see if the -- if we have passed all the tests in terms of modernizing these applications. Fraud detection, I think I talked about it in terms of surveillance intelligence. Content intelligence, especially when it comes to records management, text analytics, we work there. And in terms of like a continuous AI delivery and setting up the core foundation, we have done it in a number of financial institutions. And obviously, even in terms of a platform that we've built out for automation, this is in a number of clients today within the public sector, retail banking and financial institutions. I just want to briefly delve into 3 use cases. These use cases, what I want to showcase value is, it was not just one portfolio of a solution that we built up. Let's just talk about this European financial institution. Massive organization, number one. We've had this particular contract for the past 4 to 5 years. The challenge that this particular client had was, they want to adapt to changing regulations. And they also wanted to make sure there is a change in market conditions. I don't think money or in terms of spending dollars on our solution was an issue here. But the biggest problem they had was time to value. So we had to move them to the cloud. We had to work together with them. We had to migrate not just the massive workloads. We also -- we had to also upskill labor. So we work hand-in-hand with the CIO of this particular institution. We came up with all the plumbing that was required for a multi-cloud foundation, we used our cloud business office to set up all the thought leaders that was required. We came up with a cloud-first approach in terms of what the process and the principles needed for multi-cloud orchestration, the abstraction layer. And this -- the other change that we also had to do was upskill our own labor in terms of the digital talent we had. So we wanted to make sure that the value is still recognized with the same associate base, but we had to bring in these abstraction layers, so we could at least bring the associates up to speed faster. So what was the advantage we got out of it. One, okay, out of the KPI that this particular CIO post for us in the past 6 months was outside of managing, I want your team to be in every product team that's out there within the bank. And if you look at it within like 6 months, we have a number of associates working with a number of product teams within this enterprise. Great case to case study here. This is another U.S. mortgage leader, the whole solution that we came up with was managing continuous delivery at scale. So what does this mean, right? The challenge this particular company had when we entered them -- entered into this particular institution 7 years ago, it was all manual. There was nothing in terms of controls that they've established in an automated fashion, number two. And number three, they wanted to make sure that they move at a very fast pace. They wanted to do an agile transformation wholesale, right? Pretty complex, I would say, like undertaking. The business was very, very upset in terms of realizing IT investments. They had very low automation on top of it, right? And then this also led to a lot of the finger pointing and unproductive developer experience. So when we went in, the first thing we did was we created a proof of value. We took one critical application within this enterprise and they have 150 critical applications, right? Using this one application, we showed the power of our continuous delivery. We showed the power of no-touch application system. What this did was to kind of upscale the labor within the client base. We did this co-creation model. So post that, once the contract was awarded, we were able to build this no-touch application deployment principles within this organization, and we migrated 150 applications to the cloud. Not just that, we also categorize these applications into, I would say, like brownfield, and bronze field and gold field. And these applications, this way, it was very easy for us to categorize which pipeline these applications needs to go into and also put in all the controls automation in place where each application deployment took upwards of 3 months. Today, they are able to do it within like 30 minutes. This is a massive improvement for them. I mean, it didn't come like in a day or 2. It took us 7 years. But you can see the level of deep engineering, our talent went through and what we provided to the client. And last but not the least, I want to talk about this global airline hospitality group. This is where we had to take a digital-first approach. This particular client -- let me -- if I talk about the challenges, they had a legacy core ERP system. It was deprecating. The business process workflows were very rigid. And with any ERP you know that they needed to do massive customization and also the licensing fee was very high. This was a global challenge. They wanted to create a multi-tenant model for this particular application, right? So we went into this particular client, I would say, like 7 or 8 years ago, initially started off with a very few discussions on paper to say like, hey, what's kind of your vision? Where do you want to go with this, and started working hand-in-hand with the client, I would say, development engineering base and architecture. So if we look at the way we architected this modern flexible multi-tenant application, we had to move to the cloud. First, we had to make sure that we were designing micro front-ends for them. And if we look at it today, obviously, this particular client they moved into like 52 or 53 airports today that is functional. The ERP tool has been -- I don't think they're using the ERP tool anymore. And even in terms of the production issue reduction, it was like 95%. And on top of that, we had also reduced the maintenance cost, we reduced licensing costs. So this just gives you a small flavor of some use cases. Hopefully, this was helpful for you guys, right? But I just want to give you like 2 or 3 takeaways before I wind my session. When you think of Unisys and when you think of Unisys cloud infrastructure and applications, what we're doing in the digital. We are going to build digital and cloud native in our DNA. That's number one. We are going to build multi cloud resilient foundations that are going to power in a lot of the enterprises. In terms of AI, it's not new for us. We have worked on a lot of the discriminative AI. We have set up the foundations. When it comes to new challenges that are happening with generative AI today, we say, like, bring it. We are going to be ready for it. That's number three. And security is a core to our foundation. I think Peter mentioned it and even Mike mentioned about it. And strong digital IP as it relates to this CloudForte platform. The platform engineering is where -- how we are going to move forward even in terms of securing our enterprise and working on a massive enterprise applications in digital. Thank you. And with that, with that, I'll be handing over to Joel, my peer and Alan.

Well, I know we're running just a little bit ahead of or behind schedule, so we'll jump in real quick and give you an overview of Alan and myself. So we are one of the acquisitions that Peter and both Mike talked about. We came from the acquisition of Unify Square and have been running that business inside of Unisys up until January, will take on some new roles. And I think it's important to note about our thought process when we took on these new roles, right? Our thought process where much of the stuff that you heard about from Peter and Mike already. We have incredible clients that have been with us for a long time. My group, DWS have clients that have been 10, 15, 20 years of where we provide field services, which is our people walk out into their sites and fix things for our customers like Dell and others. But we also provide service desk and many of the core functionality that makes the lives go of every single employee of our clients. And when you can have new leaders that sat here from Unilever and from Dell and from all of our customers in the panel, new people still talk about the great things that we do. That was pretty exciting for us. And I wanted -- and Alan and I talked in the first couple of weeks about the potential of what we can take in our start-up mentality and leverage that great service and the great things with new technology and new things that are going to come into the business. And luckily, over the last 2 years, we've made big progress on that before we're even here. And you're going to hear today how that's accelerated with a few things. And so take from that, we have a few kind of catalysts in the market that are going to be impacted in the next year or 18 months, and we're going to tell you how we're going to take advantage of that. You're going to hear the biggest differentiator that we, Unisys, have against our competitors in the marketplace. And that's on AI. That's on ML. That's on a whole new feature set that we bring that we're the only one in the business that can take advantage of that for our customers and deliver higher value for our customers, pretty exciting stuff. And then the last aspect of it's not just next gen. You saw Mike's presentation, a graph that showed, and talked about the traditional revenue as well as the NextGen revenue, which does by itself carry a higher margin. But what can we take use in this technology and the things that we're bringing to the table to impact our existing business and improve margin on that. And that's pretty exciting because we're going to empower our folks, bring them up multiple levels and give them more functionality so that we can service our customers better and cheaper, which is really, really exciting. I'm going to start with this quote. So this quote is everything I just said in one nutshell, and it actually came from Patrycja who leads our entire delivery organization of about 8,000 people. So about half the company in our group and sits under Patrycja. The concept that we have is that we can't make little incremental changes. We can't add more candles in the room to make it a little bit brighter. We have to change something fundamentally to affect the impact of where we want to grow in the business. And this is core to our brief. This is core to the excitement you're going to hear from Alan and I and the things that we're doing within Digital Workplace, which is pretty impactful. And our folks, our associates themselves, we talk about this almost on a weekly basis. Is that an electrical moment? Or is that a candle moment? And it cannot be candle moments. We have to do something that's much, much different. So let's talk about kind of the key things that you should take away out of this. The basis of everything we're doing is persona. Now my job we're geeks. We're nerds up here. We can get down into technical details and use some acronyms that you guys probably don't want to hear. Our job is to bring it to life for you to hear and to understand. So raise your hand on how many have had an experience with a help desk? You've called to support. Now keep your hand up if it has always been great. Exactly. So what if, when you called in, we knew who you were. We knew the type of job you did. We knew that your computer was slow at this time. Would that change that first call, or better yet. What if we knew you just reviewed your computer, so when we told you to reboot, you didn't have to say I just did that. I'm not going to do it again. How would you feel about that, right? The impact, your excitement for the company and your happiness with that basic-level service changes completely, right? And that's personas. And the things that we're doing with our software right now actually says that. When you call in, we know the performance of the machine. We know the type of applications you're running. We know your job. We have the [indiscernible] to know that you're a doctor, and we have to service you as quick as possible. We have a great story where one of the airlines that we work with, the feedback was from them was you knew that was a pilot and that pilot had minutes to fix the problem. And the impact to our business is huge when you understand that at that simple level. The next thing that you're going to hear is we're adding some technology, and we're already halfway there with some of the things to bring time to value. And this is the big failed kind of industry and that Digital Workplace has done recently, and that is we promised this new great world of chatbot is going to replace all the humans. And you just type in your question to a chat bot and you would get instant service and it would fix your problems and how exciting. It hasn't happened to what everybody -- the hype and the promise over 5 years ago has delivered. But we're there to take advantage of that and actually deliver upon that. And the reason has it happened is the enterprise is difficult I mean, how many of you have used and tested ChatGPT, right? It gave you a great answer. Was it right? Mostly. That doesn't work in the enterprise space. right? Mostly right, doesn't work in the enterprise space. And so what can we do to not only answer your chats and answer your chats with certainty, and answer your chats with the resolution not just words, but a resolution that fixes your machine, a resolution that does something. And can we do that day 1, and you're going to hear about how we're going to do that day 1 because that's the challenge that takes 18 months or 24 months to write the scripts and the programs and all the things that make that happen which you're almost halfway done with the majority of the contracts. The last thing that we do, I think Digital Workplace is the business that can take advantage of generative AI, especially when you think about chatbots, right? As it's now no longer and if then that chatbot mentality, if you have problem X, we've already programmed problem Y into it, and it can answer it. It can be a little bit more smart. You can ask regular questions in a regular format. You don't have to know the same keywords. That's a big benefit that we'll take advantage of right away. I think there's some other benefits that will come out of it because it has an understanding to do scripts. It has the entire language library of the things that allow us to serve your PCs and service the devices that you have built into it. And so not only we can we answer you with maybe an article, we can solve the problem in real time without a human involvement. And if we can get to 30% or 40% or 50% of the cases that way, it's a game changer in the market. I'm going to spend a little bit of time on the insights. So Alan and I have been in this environment now for about 7 years where we -- everything we have done is not just a tool that monitored an uptime or a tool that saw the performance of something. It was trying to find the things that always require humans to do it in the past. And I called it the needle in haystack, or I call it -- I don't want to monitor 1,000 one things, I want to monitor the one thing that truly knows what it impacts a user. Truly knows that when you tried to launch Teams or Zoom during the pandemic, your video was garbled, right? Knows that type of stuff, and then let me solve that behind the scenes. And so those insights came from the acquisition in the unified communications and collaboration space. And now we've grown them into the digital experience, specifically the persona stuff that I was talking about, how your machines are acting. So not just Teams, not just Zoom, not just the meeting space, but how your machines are acting when you're running your Oracle system or Office 365 or any of those things. That's in our engine already, and we're expanding that even further to grow beyond and know how that tickets are and what other application integrations are and the API connections that come with it. So that part is me. The frontline services and next-gen service services. This goes back to that traditional aspect. We have the capabilities to improve that service desk that I'm talking -- agent that I'm talking about. We can make the Level 1 agent a Level 3 with a tool set that then saves not only some costs there because that's okay, but that's incremental, but then saves the impact that all you guys lowered your hand for on the pain that you've dealt with and the end user, right? And saves that impact because they solve your problem or better yet, when you call in, we know what the answer is, and we hit the button on the screen, we solve it, and we say, are you done in 30 seconds. And that's a big deal to our industry. And that's not a hope or a dream or a promise. That's something that we have in action and that we're delivering upon right now with our customers. Alan, I'm going to give you a little history -- before he kicks here on this example, which is exciting. I mentioned a lot about Unify's communication collaboration. If you've used the Microsoft product over the Internet, you can thank him because he led the team that allowed us to talk over the Internet from voice and video, and I'd like to make a joke. And if you're really, really happy with that, you should thank him. If you're really, really unhappy with that, you should to go call Microsoft and complain to them about it because he works with us now.

Great. Thanks so much, Joel. Yes. How many of you have watched Minority Report, that movie with this thing, this thing under there. I want to talk about this as an initial customer case study because it's a great example where one of the ways we're innovating in how we deliver services to our customer is not just being a technology provider but actually addressing their business solutions in an insightful proactive way. So you saw the Tom Cruise scenario. We do to the enterprise digital workplace, what Tom Cruise does to crime. And let me give you a quick example of that. So in this [indiscernible], one of the many ways we've done this proactive approach is actually deploying technology that monitors all of their meeting rooms. Sometimes people will trip over a cable, the microphone get disconnected, the camera stops working. We go beyond just monitoring and sending out somebody to fix it. If you, as an employee, schedule a meeting in that room, we'll proactively notify you and say, "Hey, guess what, that room is glitchy, please schedule a different room." Think of the number of hours of frustration you save, not just from the organizer, but all the participants. And we take it a step further. We actually measure the number of hours of frustration we've proactively prevented. We're the Tom Cruise of this customer. And we actually measure that and report it to the customer as an [indiscernible], resulting in over the last 8 months, a 15% NPS increase. This is a game changer. They are looking at our service in a whole different light than just somebody who provides services, takes tickets, troubleshoots laptops. So really exciting. And we're to go into more detail about some of the ways we do that. Now this is a wheel that represents our different verticals or different categories of digital workplace. And these are all modern. These are challenging areas and we welcome the challenge. Challenge means difficult for customer. They need a provider, an expert and they're willing to pay for it. Collaboration, I'll just quickly walk through these. Collaboration, that's where innovation happens at our customers. That's where sales happen. That's where delivery of their -- customer delivery to their customers happen. We help with that. Proactive experience. That's the Tom Cruise case. We can keep the users happy and productive. They'll be able to deliver better service to their customers. Modern device management. If we can get the device is working, whether it's your laptop, your tablet, that meeting room, we can get that to a productive state and keep it in a productive state. Our customers and employees can focus on their business and not dealing with technology and the frustrations thereabout. Intelligent Workplace Services. It's no surprise that the workplace has changed post COVID. There's a whole different set of expectations and services needed for that, and we deliver that. And finally, Workplace as a Service. This offering is all about doing to the workplace what SaaS did to the server. Can you operationalize that? Can you basically take the headache out of the minds of the customer and just offer that as a WaaS, that's actually a new thing, WaaS, not official, by the way. That's my -- I just invented that, but it's the SaaS of the workplace, okay? So don't quote us on that. It's not marketing approved, please.

So what I would take -- what I want you guys leave on this stuff is what does digital workplace mean? What does Unisys Digital workplace offerings mean to our customers. Every interaction that you have with your device. When you get your laptop is a very brand-new employee, how that interaction happens, how that laptop comes to you and all the things that goes with it. And all of your interaction points between that laptop or that desktop, in your device, your phone or a conference room, every service interaction with that is what Unisys provides our customers. And those are service offerings that are long-term, long relationships, reoccurring revenue that are impactful to business.

Absolutely. And this is just a smattering of the kinds of solutions that we deliver within each of these different categories. And I have to emphasize that this is not just aspirational. The vast majority of solutions we're delivering now today and having impact with our customers. Now I'm going to do a quick whiskey flight across a couple of these since we don't have a lot of time here. The first one I'll highlight is seamless collaboration, the front-line worker enablement. Now when you think about a customer and the persona, the users that have the most impact on their customers is these frontline workers. It's the delivery drivers, it's the restaurant crews, the doctors and nurses. Our offering has been expanded to not only deliver services to these back-end information workers, but to these frontline crew workers, the doctors and the nurses. And these actually represent 80% of the users of the enterprise space. So it's a massive just raw expansion of even our existing customer base. And I'm excited to say that we're also Microsoft -- Microsoft themselves have expanded their own offerings to include a frontline worker offering. We are a certified partner of Microsoft. Our offerings are in Microsoft's catalog. So we're going to ride the coattails of that expansion and deliver that business transformation to our customers, really exciting stuff here. The next whiskey we're going to try here is around proactive experience. And endpoint is experienced. Now endpoint, when I talk about endpoints, I'm talking about your PC, your laptop, your tablet, your mobile device, these are the tools we all use in order to be productive. And we're already delivering the experience service around each of these endpoint [indiscernible] today. The question is, hey, why not just consolidate that into an end-to-end experience. And I know, Joel, you have some thoughts on this that I think you might want to share. Yes. So in.

My first 3 points I want you to take away and knowing this big catalyst events that are going in the marketplace right now. One of them is what happened in the start of COVID. Everybody moved to cloud and then we put laptops in the hands of everybody to sit to work remotely, right? That -- we're running up on the 3-year refresh cycle that comes to that. Organizations have already gone from a CapEx to an OpEx expenditure for that. Now they want the next thing. And this is the next thing because now we can say, you don't ever turn your laptop at home. It sits in your closet, why do I need to refresh that for 3 years? I can be smarter about that. I can give that laptop an 18-month refresh cycle for a doctor. So what can I offer to my customer? That's not a hardware resell at low margins. That's a hardware resell that uses incredible services that we have that is a managed service that delivers it for a cheaper offering to -- or a cheaper expenditure for our customer, but brings better service, better capabilities in the hands that are needed. It's a massive differentiator at the right time in the market right now for us to take advantage of it.

Wonderful. And Workplace as a Service, user onboarding, you mentioned this notion of operationalizing what typically was a CapEx self-managed type approach. We're taking that a step further. When users get onboarded, one of the biggest challenges is retention at first year. If you lose that employee in the first year, 33% of customers lose an employee within year 1, costing about $57,000 per employee. Now we have an offering where -- and we're actually [ dock footing ] it internally. We're drinking our own champagne. If you're a new player in Unisys, you will actually a month before you get your start date, you will have an experience where you get a welcome video from our own peer [indiscernible]. Sending the context, the culture for the company, you will sign your forms, your employment forms through that workflow. You'll see your device and say, "Hey, okay, I will choose this one. I kind of get a status for one that will get sent to me." It's all about having that great onboarding experience, and we just saved 1 or 2 people saying, "Wow, this company really cares about me, I am happy. I'm going to stay there." Huge benefit for our customers. Now how do we bring these innovations to our customers in a way that is differentiated. What's our secret sauce. This is our secret sauce. PowerSuite and InteliServe vNext. Let me talk about PowerSuite first. Now PowerSuite is something that's actually 12 years in the making. It came all the way from the Unify Square acquisition. It's a data-driven platform with machine learning AI algorithms prebuilt in to deliver insights. Now let me go back to the Minority Report example. Remember, you have those 3 people in the swimming pool, taking a summing lesson, and then a little ball came out, right? Like I said, insight -- crime is going to happen. That ball represents the insights coming from PowerSuite. We take those insights and then feed them to our operational team, our Tom Cruises, well, not as handsome, but they don't have the clear screens, I'll be honest. There's no clear screens, but anyhow -- but they -- and they drive those insights through our customers to achieve those outcomes. That is the power of PowerSuite. InteliServe vNext, we do a lot of automation today. This is not a new thing either. However, what we're doing is we're taking the best of all automation and prepackaging that into pre-built automation that we can deploy to multiple customers off of a single code base. And that code base is going to be technology agnostic across the different technologies that are already existing at the customer. And moreover, I'm excited to say this automation is not just for the takeout of our service desk in terms of always going to a chatbot. Now we're going to deploy that automation both to our service desk agents as well. And so now if you're a user, yes, if you want a self-service chat bot, no problem. You get your automated workflows. But if you call a service desk agent, to Joel's point earlier, you're going to get a much better experience, an agent that's empowered and doesn't talk to you for 15 minutes and say, "Oh, shoot, I don't know how to do that. Let me transfer to you another agent." Most frustrating thing we've ever had, right? Do you think, Joel, you want to add?

Leave this with that the 12 years that we talked about. This is the barrier to entry that our competitors don't have the advantage. We've just spent a bunch of time with the analysts here, and that was the feedback we got from them is you have something very unique. It's not that you're bringing some aspects that come from the industry like a chatbot and like an ITSM tool, which is a nerdy acronym for how you track tickets and things or your asset management and you bring that together, call it a package and deliver it to the customer. That is not what we're doing. We have technology here that are going to allow us to impact that customer on day 1, that time to value concept that we talk about. We have technology here, there is a massive learning curve and a massive time to ever get to, and that's the insights that come out of PowerSuite in the expansion. That's Unisys' differentiator in the market. And the analysts are taking note right now.

Excellent. Thank you. And if you look, this slide just shows a few of the examples of scenarios that we're delivering around through PowerSuite and InteliServe vNext. I do want to mention that we also have a transformative consulting team. And the whole idea of this team is that, frankly speaking, sometimes our own customers are not at the maturity level to achieve these modern operational models. That's where our consulting team comes in to play. They will be the leaders and guide our customers and help them realize how to get from that current state to the modern state and be the foot in the door. And the cool thing is that these consulting services themselves are growth engine of revenue and margin. So not only do we get additional business output out of this consulting service, we get them to drive the foot in door of our modern offerings. I think one of the cool scenarios, I think, as we're talking about under PowerSuite, RTO, everybody is talking about return to office and RTO efficacy. This is a great example of where PowerSuite can have an interesting play. And Joel, I think you have an interesting story to tell them in this.

I'm going to spend 30 seconds on it. I know we're really running up against the time right now. But we have the ability right now and we're doing it for our customers to tell when you go into the office, what meetings are you on and how many people are remote in that meeting? And are you the only one in that conference room talking or have a video session on. Why is that important? Well, we all are fighting what's the right thing to do with return to the office, whether we force people back, what value are we getting back. Our software right now will tell you, are you more efficient because now you have 3 people in that meeting space in the office instead of one. So now that collaboration is happening a little better. Or you're having the exact same meetings you do in the office, on the exact same video screens and you're sitting in a cubicle just like you did at home. Well, then you start to question what's the value of return to office in those places. And those are -- that helps our customers make real estate decision that helps our customers understand they need more meeting rooms because they're full at that time. The value to our customers that we provide are not just the old legacy systems that Unisys has been known for. It's new and exciting stuff that brings us closer to our customers and our CIOs.

Great. Finally, we're at the AI slide. Everybody has to have an AI side. Now I think the interesting about our particular offerings is this is not a new thing for us. We have a dedicated machine learning AI team that's been in place for well over 5 years. So doing experiments and algorithms. And those are the algorithms that go into PowerSuite. Those are the algorithms that were used to drive that one to multiple impact across our customers and shift us from a pure labor driven model to something where we're focused on outcomes and multiplied impact. I want to just give one example now on the generative AI side. This is, of course, very new from an industry standpoint, but we are right in the cutting edge. We're leveraging all of those existing technologies that are coming out and changing by the week and actually doing implementations at several of our customers. Let me give you one interesting example. There's a large restaurant company that actually for their frontline workers today has a 120-page guide for how hot to cook this particular menu item or how to store the eggs when you put it in the refrigerator. Do you think the crew members are going to go and look at this long list when they have to onboard them. So no, no, no. They want to deploy a bot that says "hey, let me use my mobile phone. And if I need to know how long to cook this [ pictured ] food item, I just entered that into the chatbot, and it shows me the picture of what a properly cooked sandwich looks like." What's the temperature to make that go right. We are taking that and applying it into Azure generative AI, not open -- OpenAI because it was all about data privacy and with the conscious of all of that and doing a proof of concept of that with the customer. And because we're already delivering existing services with a customer, it's a natural land-and-expand motion, great use case here.

And how awesome that our customer came to us and asked us to do that. That shows you a level where Unisys is in those relationships and our capability to come.

Yes, absolutely. And for certain, there's no question that generative AI have from the standpoint of rapid code development, empowering our own agents to be more effective, find information more quickly, just -- there's just so much that we're doing in this particular space. I'm going to wrap up with 2 quick examples I'll talk about very quickly. This is a large real estate company and their particular challenge was that when they onboarded new employees and contractors that they're paying by the hour, they had a multi-day onboarding period where they're losing not only productivity, but hard dollars they're paying to these contractors that are sitting around while they're waiting for their laptop to get provisioned and set up. We took that through our modern device management solution and have that be onboarded in less than an hour. Massive change in productivity, massive change in hard dollars they spent for their particular contractors. And the last example here, I'll mention here is on the healthcare system. Again, a good example, we're right there in terms of their business challenge and their business goals as a business partner. They are merging 2 hospital systems, 2 totally disparate technologies. And we applied that whole, again, the Tom Cruise type scenario. We applied a whole range of proactive fixes, and that applied something like 3 million proactive fixes across their user estate. And think of the number of hundreds of thousands of hours. I think we calculated it. It was 470,000 hours of time we saved of doctors, nurses, technicians. The business impact there is just unquestionable. And it's just a good example of how [indiscernible] on these personas, these actual users, knowing their business narrows is where we drive the business impact and the value that they perceive from our services. Joel, I'm going to hand it over to you for a wrap up here.

Yes. I'll wrap up on this one. I said that there was a few business events that are coming out there, we're going to be able to take advantage of. What Alan just talked about has been in the ideas of companies for a while, but it was postponed during COVID. The investment in workplace experience was postponed in COVID. We hear from our analysts right now that RFP engine is running up. The answer to all of this is not saving IT dollars. The answer to all of this is translating in what IT is providing to the business into the more productivity that Alan just talked about in that example. And so everything we do because we understand the personas actually measures that and gives that data back to IT and back to the business so that they know the real value of IT. That's a unique approach that Unisys has taken on there to not just look at us from a cost engine, but look us as a value creation and a productivity creation back to the end users. So hopefully, you understand that differentiator. Hopefully, you understood these places and where we're going with our market, and it's a pretty exciting opportunity each of us wake up every single week and excited to talk about it. Thank you very much. Thanks for your time.

Ladies and gentlemen, we'll be taking about a 10-minute break. Please be back in the room promptly in 10 minutes. Thank you. [Break]

Ladies and gentlemen, please find your seats. We're about to begin. Ladies and gentlemen, please welcome the Senior Vice President of Enterprise Computing Solutions; Mr. Chris Arrasmith.

Thanks, everyone. Great to be with you, a privilege to be with you. You saw just before I came up here, hopefully, imagination to realization, and I want you to hold on to that because at the tail end of my presentation today, you're going to see what we mean by imagination realization. I'm really excited to show you that. Before we get there, I want to tell you a little bit about what we've been up to in enterprise computing solutions here at Unisys. So we're going to talk about opportunities in the market, how we respond to those opportunities, we're going to talk to you about how we bring that to life with clients. We're going to talk to you a little bit more about our overall portfolio, our solutions inside of there. And then this quantum deep dive is where that imagination to realization is going to come to the fore. We keep breaking through is something that resonates with us because it speaks to our past, it speaks to our present and it speaks to our future. We break through for clients. We break through internally. We do this all the time, and you're going to see that come to life today. Opportunities in the market for ECS are varied, and I want to just give you a glimpse of what that looks like and then, of course, how we respond to that. So first and foremost, protecting business-critical workloads has really been the cornerstone of ECS for a long time and continues to be. As a matter of fact, even in my most recent discussions with clients as recently as 2 weeks ago, we will continue to protect those business-critical workloads for decades to come. In order to do that, we have to help our clients overcome skills scarcity, the systems of yesterday, the systems of today, the systems of tomorrow, how they all work together. We have an unprecedented access to understanding how all that fits into a broader ecosystem. And so there's a compelling opportunity for us to drive services in the market that answer the call for skill scarcity. By the way, because we also know so much about these systems, we know how best to train people and accelerate learning so that we can have an evergreen workforce that has the skills that are required to take us into the future. The third thing we're doing is we're embracing emerging technologies. I think I'm maybe the record setter on mentioning generative AI today early in my charts. But in fact, we're making explorations there in a significant way across the spectrum of client outcomes, client experiences, internal outcomes, internal experiences. But in addition to that, we're studying what we call next-gen compute opportunities, and you'll see quantum mentioned here and then again later. But we're going to give you some other examples of that, too, as we go through the course of today. And then lastly, we focus on creating value for clients through data analytics primarily driven by industry solutions. We're going to talk to you about our methodology and our approach for that today as well. So our response to those client opportunities is really embodied inside of these 4 things that we do inside of ECS. These 4 things are then further compartmentalized into some of what you've heard from us in terms of segmentation, licensing and support, or L&S, the lion's share of L&S is ClearPath Forward. And then specialized services and next-gen compute or SS&C, where our services expansion plays encompassed managed services, application transformation services. Next-gen compute, I've talked about quantum. We've talked a little bit about AI. There are other architectures we'll visit on for a brief period. And then again, these industry solutions where we have a depth of experience, measured in decades in core industries like travel and transportation, and banking and financial services. I want to give you a sense for some of the breadth of what ECS does in a few different ways. And this is one important way for us to look at it, and that's related to client outcomes. So on the left-hand column, we're giving you an illustration of a successful transformation in a private cloud context for a long-standing ClearPath Forward banking client, who, as you can see, has a really complex estate, a large code base, a significant number of workflows, a huge number of applications that required a heavy-duty effort from them and from us. And the trust that they put in us to make this happen for them is borne out of, in fact, decades of partnership. So we've earned the trust, we've earned the reliability and we've earned the opportunity to help our clients create these outcomes. In the middle column, we're giving you a view into this government-owned financial institution where we operate and manage millions of mortgages. And that's not just at the infra layer, but in fact, all the way at the application layer where those mortgages are interacted with by employees and by Unisys associates that are tied so closely to that financial institution that, in fact, we're helping them now with how to sustain themselves into the future, grow their resiliency, overcome that skills gap I talked to you about. That's a significant opportunity for us. Again, [ borne ] out of a very long and successful relationship. And then lastly, on the right, in air cargo, where we've been operating core cargo management systems and cargo portal services for, again, decades. And we have special insight to these industries like air cargo, and you're going to see that come to life in a little bit. And what's interesting about this air cargo example is that it is borne out of ClearPath Forward. But it does not rely on a client to purchase, deploy, manage, keep up to date a ClearPath Forward system. And that is a pathway to the future. Okay. So I gave you a few examples of where ClearPath and associated ECS services come to life for clients. I want to give you a bit of a broader view here, a mixed view where we talked about the mortgage volumes we're managing in Brazil, 70% of the mortgages we service, travel through Unisys ECS systems and with the help of Unisys associates. 7% of global air freight runs through Unisys services. 80 million, that M is for million, voice mailboxes in EMEA. And 8% of passenger volume globally travel through and over Unisys systems. And we're talking about very sensitive and critical mission-critical systems. And then further out here to the right, just to give you a sense for other areas we touch on an ongoing and continuous basis. We've got some industry views here. And then as well, even other industries, we wanted to make sure we mentioned to you, but that come to life through what we call daily life here, for example, where accessing voice mail is certainly one instance, as I mentioned. But also in insurance claims, in accessing your lab results for -- there's nothing more mission-critical than your health, right, lab results for an example, and on from there. So we just thought it was important to give you a different picture of the breadth of what ECS touches and what Unisys touches on a daily basis. We have, for many years, we intend to continue for many years to come. So who are we in ECS? We are 2,100-plus global associates. We are 1,200-plus engineers, software developers, testers, coders, engineers at all levels, distinguished engineers, our most senior folks, junior engineers who were training to be the senior engineers of the future. Really proud of our team. 75% plus of our top L&S accounts are coming to us with demands for increasing workloads. Remember, L&S, we're going to drill into that a little more, but L&S is really primarily focused around ClearPath Forward. Three quarters plus of the top clients in that section come to us with more workload, not less. We support over 5,000 organizations through the combination of those whom we support directly, those who are accessing Unisys systems via [ resell ] or those who are hosting applications in Unisys infrastructure globally. We're active ECS in 43 countries globally and we enjoy very high customer satisfaction scores, 9 out of 10 from our most recent round. And I'm going to give you a slightly different view of customer satisfaction in just a moment. All right. Let's talk about L&S. So L&S, as I said, largely focused on ClearPath Forward. You might ask, well, what is ClearPath Forward? I got an answer for you. ClearPath Forward over time for us is you've heard, it's very important. And we don't just measure ClearPath Forward as important for now. We measure ClearPath Forward as important for the future, and we're measuring the future of ClearPath in over the next 30 years. So our view for the future is to prepare for expanding, evolving, enabling ClearPath Forward products and platforms for the next 30 years. So what do we do? We offer secure high-intensity compute environments, as you can see here. Those compute environments encompass everything that you see on the right-hand side of this chart from the basis of the reference architecture in which it's built to where it is hosted to enablement of the applications that sit on top. And that enablement includes data transformation capabilities, data extraction capabilities. low and no code development environments at scale. And by the way, that scale continues to increase. We continue to increase the capacity and capability of these systems on an ongoing basis that encompasses multiple platforms inside this box, multiple ways of deploying these platforms, more than a dozen individual products that are tied to and attached to these platforms. And that comes to life at the top end here through a combination of Unisys solutions, client-built applications, partner-built applications. And many times, collaborations to make those things come to life. So we work with our clients very closely in a lot of cases to drive these applications and sustain them and then to evolve them into the future. So clients choose Unisys and choose ClearPath Forward again and again over the course of time and indicate their intention to continue to do that. They tell us that and they also come to us for increased workloads. And they do that because we offer a secure high-performance environment. It works. It is extremely stable. They come to us because we have an ecosystem that addresses the challenges of an ever-evolving technology landscape and a business process execution landscape. So those data transformation capabilities. the necessity to provide different UI and UX experiences. The necessity to have an increase in scale and capacity over time and to answer the call for the evolving picture in terms of security are part of the reason why clients come back to us. And we attach services to those things because we know clients need help driving value from these systems over time. And again, there's a skill scarcity challenge for us to overcome. So what that creates with -- along with our continuing commitment to innovation in these platforms and products are really satisfied clients. And you don't just have to take our word for it. From our most recent round of customer satisfaction surveys, we've given you just a few highlights here. And we've highlighted a few words just to illustrate this a little more directly. Great agility, great flexibility, adaptability, stable, reliable, helped us reach our success, extremely long track record helps us protect our investment. There is no better testimonial for us than hearing these kinds of things from our clients. So we thought we should share them with you. So we're going to turn the page a little bit. Because what we earn in customer loyalty and in responses like that is an opportunity for us to, in fact, make good -- on a quote that comes from a former Unisys associate and a computing pioneer Grace Hopper, who said that the information is, in fact, more valuable than the hardware, which processes it. And if you don't know much about Grace Hopper, I would encourage you to look her up, a fascinating life. And we're really proud to be attached to Grace as a fellow Unisys associate. So that's going to pivot us over from L&S, very sticky, long-standing, now into the future, profitable for Unisys into SS&C, services expansion opportunities, next-gen compute capacity, industry solutions. We're going to take you through a few examples of those. I'm trying to find like a whiskey flight or a Tom Cruise reference here, but recent Harvard Business Review says 87% of digital transformations are failing to achieve their expected outcomes. For clients who have a desire to do a large-scale digital transformation, we're part of the 13% at Unisys that are successful. And for that, we go to our cloud team that Manju leads. But we also think there's a unique play for us in terms of enterprise computing solutions for an incremental approach. You don't have to go all the way right away because if you've invested in ClearPath Forward as your system of record and it's running and stable and it continues to grow in its capacity to do work. And it continues to be an enabler of your ecosystem. You should get more out of that investment over the course of time, and we will enable you to do that. We'll do that by helping you prioritize with our experience in these key industries and with our clients prioritizing what's most important. How are we going to, in fact, help you unpack the business process that's been embedded in these complex applications in this complex code base over the course of time. We have unprecedented views on those types of things in these industries. In addition to that, this incremental approach allows us to do things like make good on UX enhancements without having to refit the whole shop, that we can help you with flexible, low or no-code platforms, as I mentioned, as part of the existing ecosystem and as well as hooks for new parts of an ecosystem as well. And that speaks to that adaptable foundation. We will meet clients with ClearPath Forward, where they are and where they would like to be, whether that's on-prem, whether that's in the cloud, if they want us to ship them the gear, shrink-wrapped with a Unisys tag on the bezel, we can do that. But in your private cloud and your public cloud and a hybrid deployment, we're there for those clients just the same and there's a compelling value prop for this type of an approach for our long-standing base of clients. So we've talked a little bit about the other elements of SS&C. I want to give you just a little more depth there, okay? ClearPath Forward based managed services really is the answer to that skill scarcity in the market. I think that's -- it's pretty easy to make that connection. And in fact, as I said, we are the accelerators, the enablers of the skills of the workforce of the present and the future to help our clients continue to get a maximum return for that investment. We've talked a little bit about ecosystem modernization in that incremental approach I reviewed with you on the last chart and as well around the tooling that we continue to drive and evolve through our ecosystem to create opportunities for more value. And in next-gen compute research, we're exploring in active -- very active channels, quantum computing in 2 key ways: one, in a cryptography context because as the purveyors of the ClearPath Forward platforms, we have an obligation to respond to the developing security landscape and quantum cryptography is a really important part of that, but as well the practical application of quantum computing. How do we harness the power of a new and different high-capacity compute model so that when clients come to us with a question about compute, we have an answer that is different from we have a ClearPath Forward machine for you, which we do, and we love that, but we think we ought to be good at a few other things. And so quantum is an example of that. And in addition to that, we're exploring additional other architectures like high-performance computing clustering and how to bring that to life, serverless architectures and even edge device architectures. And we're working with our digital workplace colleagues to understand how we can deploy modern workplace capabilities in order to ensure we capture all that telemetry and all the power of devices that are out in the field. And we bring that to life as time progresses through the industry solutions that you see us mentioning at the bottom here, travel and transportation solutions that had a history and a basis for being hosted in or living on a ClearPath Forward platform, but that's not necessarily an obligation for the future. The same story goes for our banking and financial solutions. Long histories, core banking, digital banking at some of the largest banking institutions globally. We partner very closely with those firms now and in the future. And then lastly, this thing we call Unisys logistics optimization, which I'm really excited to talk with you about. So the basis for the creation of Unisys logistics optimization is that, in fact, we have a unique opportunity in front of us to take advantage of data analytics and AI capabilities that are existing in the market and to marry those up with our unprecedented industry expertise, as I've mentioned and hook those together with pretrained data models because we know how these systems are architected and know how they work. We can deploy tools to create pretrained models that are informed by the expertise that we have driven and earned the trust around our clients from for over 40 years. And we then hook that together with client and other external data sources to deliver what we call outcome-driven industry-specific solutions. We're very selective about creating outcome-driven industry-specific solutions because it's important to us that they touch multiple aspects of client value chain. It's not just one thing, it's not just one subset of a business process or a workflow. It's a more macro view, multiple opportunities to drive value. We think it's important to illustrate to you some of the data engineering that goes into and as a part of this methodology. So that's what you're seeing here. Oceans, lakes, wastelands of data, right? That's unstructured, structured and dark. We thought we'd dress it up a little. We take that unstructured, structured and dark data, and we engineer it via this process of acquisition of cleansing, of transforming, of making sure it's well formed and clean and usable that we then use that to train a model that we validate that model so that we can create a rationalized actionable data set, and that's the starting point for us to do something with that data set. And what we do with that data set is we hook it into an advanced analytics engine, and we deploy specific artificial intelligence capabilities there to create what we call this reinforced machine learning model. Because it's only as good as how up to date and current it is because if you deploy a machine learning model one time, it's aged, it's out of date, it's inaccurate, et cetera, almost immediately. But through reinforced machine learning, we're able to repeat the cycle and as new inputs come in, either from machine-based data or even human in the loop inputs, we can ensure we have the most up-to-date data set. So in our case then, we have a reinforced machine learning model, and we're hooking that together with what we call -- what is a quantum annealing capability. I'm going to talk to you for couple of minutes about that. Quantum annealing is basically a special type of quantum computing that is built for optimization problems, will allow us to take [ apps ] at a very large scale, a series of hypotheses and run tests against those and get an output. And it -- and it enables us to create models that are of a size that a traditional computer would take 7 years to get through all the permutations of. And it allows us to get the data return for that same problem in 7 seconds. So if you had a huge data set, a huge number of permutations and you put it into a classical computing context, it takes 7 years to get to the conclusion of the crunching, if you will. And the quantum annealer takes that same problem and gives us the return in 7 seconds. So if we have a near real-time capability to take advantage of a reinforced machine learning model, and bounce a problem off of that model and get the return, as I said, [ in near ] real time, that enables the creation of a next level business outcome. And that next level business outcome for us is wrapped up in what we call Unisys quantum IQ. So Unisys quantum IQ is the parent solution for a number of solutions in the quantum space. The first of those will be Unisys logistics optimization. So when I talked to you before about imagination to realization, this is what I was talking about. Unisys logistics optimization takes from our long history of providing leading air cargo services globally and takes that model and enables the real-time optimization of air cargo for any size air cargo operation. And when we think about air cargo, we think about what we call a unit load device, a ULD. It's that funny-shaped container that you put packages on to put in the belly of an airplane. It's like a pallet on a truck. It's like a bin, you might throw some stuff in for your own vehicle. So optimizing what's going into a ULD today looks a lot like this. It's -- I am an air cargo operator, I take a piece of paper, it's a pick sheet basically, it's go find these packages, put them in the ULD as best you can, but one is missing, okay, move on. And this one, I can't put on top of this other one because it's weight sensitive. And this other one is damaged and on and on and on. And in fact, clients of ours today operate just like I just described. But in even more real terms, they can drive an optimized view of a certain subset of packages, but it takes 2 days. Two days, the planes gone and back and probably gone somewhere else again. So near real-time return of an optimized model is what is really what's at stake here. And so without any further ado, I'd like for you to see this in action. So if we could please roll the video. [Presentation]

So that's imagination to realization. We're really excited about this. I talked to you a few minutes ago about our industry solutions focus and the necessity to touch multiple parts of the client value chain. And these are the examples of the outcomes that we are expecting to drive as we enter our pilot for this solution right now. And these outcomes include a reduction in claims for air cargo operations, damages, lost, didn't show up on time. Revenue leakage that today is ubiquitous. The enhancement or improvement of fuel efficiency by providing an optimized load inside an airplane. The improvement in on-time performance, the reduction in ground handling errors and as you see here, reduced emissions and carbon footprint. And this is really just the beginning. If you think about that ULD pallet bin example, it doesn't stop with the bellies of aircraft. We'll carry this into other markets over the road, over the rails, over the ocean. So I hope this has given you a view for what we've been up to in enterprise computing at Unisys. We're really excited about the future. We think there's a strong future for licensing and support. We know there's a strong future for specialized services and next-gen compute. And thank you very much. I'm going to turn you over to Chris and Lisa. They're going to tell you about our go-to-market approach.

Good afternoon. May name is Chris Wenzel. I lead our Global Vice President of our land of our sales market.

Lisa Madion, I'm Senior Vice President of Global Client Management. So I'm the expand piece of what you've heard about today.

Today, we're going to cover 4 topics. Why choose Unisys, our sales philosophy that runs throughout our whole sales organization, our partnership ecosystem and why that matters and how it helps us scale in our go-to-market activities. And then we're going to share a couple of real-world examples with client case studies. So I've spent over 25 years in tech. I've worked for companies like HP, Cisco, I spent 5 years at Dell as a Vice President. And at Unisys, one thing rings true. Technology is really that enabler that takes things from basic to extraordinary. And what I love about technology, and I feel like I have one of the best roles at Unisys is I can bring all of these solutions that the BUs have brought you to life for our clients. And what's really neat is no matter what economic situation is going on, whether the market is up whether the market is down, whether we go through a pandemic, a Y2K, there is always a need for technology. Technology is always doubling every 18 months. And that is really amazing because no matter what, our clients need technology to reduce cost, to be agile, to scale faster, to be profitable, to shift and change and really be those companies that are going to be relevant moving into the next decade. Why choose Unisys? There's 4 reasons: experience, expertise, impact and innovation. So first thing, experience. Technology, like I said, it's that lever that takes you from a basic to extraordinary. We have a wealth of expertise within Unisys to help us help our clients, and we're very agile as we help our clients with regards to that. And that experience rings true as we work with our clients because it helps them realize the technology that they need to, the expertise that matters. The expertise is agile and mindset. We ask a lot of questions, and we qualify it. Let me take this off. The expertise is global, and it helps our clients realize what they need to realize across their organization. And in many cases, our clients don't always have the expertise in-house so we can help them. Having an issue with the mic here [Technical Difficulty]. Let me jump back on here. So the expertise, it's global. Our clients don't always have the expertise in-house. And so what we can do is really bring the expertise to them to help drive that technological advantages for them. But we also have over 150 years in-house in order to bring that advantage to our clients. The impact that we make every single day, it makes a difference, not only in our organization but for our clients. The impact that we would bring is reduction of costs. We increase efficiency for our clients and our clients trust on us to deliver on the commitments that we give them. And that's super important and then the innovation. Today, you've heard a couple of examples of the things that we're doing here at Unisys to really bring that innovation to life for our clients like the transport solution that Chris just shared. So the sales philosophy. When you really look at it, I've had a couple of sales philosophies over the years, and this one has always ring true. First and foremost, it's about our people. The people in our organization as well as the clients we serve, the type of culture that we drive internally and how we work with our clients really makes the difference. The process, how we go to market for our clients and how we meet them on their journey is super important in order to make sure that we help them realize the gains that they need in order to be successful. And then the partnerships. Who we sell with in the marketplace. Those partnerships are really key, not only for us to be successful, but for our clients to be successful. And as we think about those 3 aspects, that really drives profitability, not only for us, but are also our clients and also our investors. So how are we structured? This is super important. Like I said before, I'm the land aspect. So my team hunts the new logos that come into Unisys. Lisa's organization, and she's going to share a little bit more about that. Once they come into the organization and her team delivers on that experience, her team works to expand the current opportunities whether it be a current contract or into other business units. But no matter whether you're coming to the company externally or you currently work with us and we work globally as you could see here, it's all about the business units and how we work with them to make sure we realize the types of technology that they need. And so no matter what type of client you are, you have access to all of our business units. And really, we drive both traditional solutions, and we talked a lot about that next-generation experience for them. And then the global partnerships that's super important to our clients. So no matter what size they are, being able to leverage the partnerships that we have is critical for not only our success, but theirs. But as you can see here, our clients are really the center of it all. So the process. It's about working smarter, working smarter and creating faster proposals, creating a bid desk to go to market so our clients have exceptional experiences, and they're capable to realize the gains of our go-to-market activities with them faster, having consistent pricing models, having repeatable sales and maximizing the time with our clients. And so as we work with our sales teams, we really like to learn from our clients how that experience is and then internally try to improve processes so we can go to market quicker. And what are the markets that we serve? So traditionally, you've seen Unisys in commercial, financial services and public, but really in that large client segment, and our large clients have a very big motion in terms of the type of solutions that they need. Sometimes they have their expertise in-house, sometimes they need some assistance. But we've done the market research, and we've seen that mid-market is really a sweet space for us that we need to enter into. So in addition to the markets that we currently serve, we're going to go after that mid-market space. That mid-market is a constant evolution. They need rapid adoption of technology, which is super important. They need to scale they need to take a look at all the technology that they bought over the pandemic, and they need to try and figure out how are they going to incorporate it into real world in order to take them moving forward. And whether it's the core, the cloud, the edge, the security, making sure that, that mid-market space is capable of leveraging technology to reduce costs and go to market quicker. So we talked a little bit earlier, Mike brought to our attention that mid-market space, we define it as the $2 billion to $5 billion space. And the verticals that are listed here is a subset of what we go to market with, where we have proven experience. But this market is really important to us because it's a $14 billion market. And less than half of these mid-market players have a technology road map. And so that's where we come in. We will help them on their technological journey, either take the technology they have and optimize it. We will use technology to reduce costs. We will look at their environment, no matter where they're at on their cloud journey and help them along the way. But we know that they want to scale quicker and we know that they also want to have shorter sales cycle and they have the money to spend on digitization, innovation and security. And one of the challenges they have right now is human capital. How do they acquire that talent to make the realities of what they want to do, happen, as well as how do they go to market and acquire talent in order to do the day-to-day things that they need to do within their organization. So how do we go to market? So not only do we go to market direct and that is very important because we have a heartbeat with our clients every single day. But in order for us to scale, in order for us to serve the markets the best, we also leverage channel and alliance partners, and I'll show you in a moment some of the key ones that we partner with. But the channel and alliance really gives us the opportunity to leverage relationships and innovation as well as it provides us the ability for us to help our channel partners be successful. And then private equity. This is something that's super interesting to me because when we think about private equity, it's the ability to work with these firms that have maybe 20, 30, 50, 100 companies under them in their portfolio and help them realize real world and move faster the type of profitability and cost reduction that they need in order to be successful. And it's a win-win for all of us. So here are some key partners that we work with. And I'm sure you've worked with some of these partners, you've seen them, AWS, Dell, Google, Microsoft, ServiceNow. We have over 10 million users supported. And when we think about that market, we talked about how big it is. Well, how are we going to scale. Well, the way we're going to scale is we're going to leverage these partnerships in order to be successful. They have innovation engines of their own. They have sales engine on their own, but also they're selling a lot of technology. And our clients are really struggling to just how do I take it all and bridge it all together. Well, that's where we come in. We work with these providers to look at the tech stacks that our clients have and make sure we put a plan together and help them realize that. We transform the user experience for our clients. And when we think about them, they also need us to help them sell their organization as well. So this is really something critical to our success. And it allows us to scale our sales force without having to hire a whole bunch of talent. And then in conclusion, before I hand it over to Lisa, it's really about point of spear offering. So when we think about that go-to-market, how do we open new logo doors. It's about quickly establishing value with our clients. And how do we make that impact the first time we meet them and take them along their sales continuum. So first and foremost, about the point solution. How do we take standardized technology offerings, go to market faster, make them repeatable and make them simple to consume. Secondly, it's that project work. So when we think about our clients who have projects that are very customized, very specific, and in order to make their outcomes happen, we can bring in that expertise and swoop in, do what needs to be done and then allow them to continue on in their journey and then look for other opportunities to sell inside their organization. So a little bit more of a custom engagement. And then finally, that industry solutions piece, which is really important, going back to some of those BU examples like the transportation and logistics solutions. And we think about that in fin apps and other places where they really need our assistance, that's where we will really push in from a spear offering. And so with that, I'm going to hand it over to Lisa.

Thanks, Chris. Okay. I have my mic, how about I just take this quicker, right. So as I said, Lisa Madion, I've been with Unisys for about 8 years. I have spent most of my career in client-facing roles, however. You've heard a lot today about long-term clients, cross-selling, expansion. And so what I'm going to talk about is a lot of those things you've already heard, but I'll try to bring it into a little bit more reality on how my philosophy is on selling. So first off, it starts with the client. We've talked a lot about the client today. It is a relationship. Clients buy from people that they trust and that they have that relationship with. So as I leave the client executive organization, how do I go and gather that feedback from my clients? Number one, it's from traveling and visiting and talking directly with the clients. We do our NPS survey, and I know Mike referenced it. I think Chris, you referenced it as well. Those surveys serve multiple purposes. One, it tells us how we're performing. Two, it gives them an opportunity to tell us where we can improve upon. And then three, it actually calls out our associates who are doing really, really well, and it gives us an opportunity to give them accolades as well. And then finally, it's really having that innovation sessions. So all of my peers that you've heard from today have started innovation sessions with our clients. It's the opportunity for them to have that intimacy with them to talk about opportunities to advance their business challenges and drive it to a different matter. So when I think about what we do really, really well in building these trusted relationships, it's really that personalized attention. From Peter on down, we visit our clients, we sit across the table from them and have conversations. Innovation, every client is looking for innovations. They have a business strategy that they're trying to address and they want to know how we can bring a technology solution to fix their business challenge. And then ultimately, it is about a partnership. We want a win-win relationship with them. Neither one of us wants to be in a situation where they're getting more or we're getting more. So what does that mean then when I actually tried to take this into the expansion piece of it. One is making sure we've got the right talent on the right engagements. We spent quite a bit of time working with the business unit leaders, my peers and finding these CTO type resources. They're able to sit across the table from a client and bridge a technical conversation and a business conversation. I saw it firsthand and visiting some clients in EMEA and it was just brilliant. They really have got the trust of the client relationship where they listen to them. They're understanding the business challenge and the client understands that we know exactly what their challenges are and how we can go help solve them. The other thing we've done is I've segmented my business. So we looked at all of our existing clients and determining Mike's reference to white space, we looked at the white space of each of those clients. So although it's about roughly $30 million that we've got available to us, some are going to grow at a faster pace, some are going to grow at a slower pace. Some have contracts that they may have just signed with competitors that may not be up for 3 years. So we really look at how does that lay out then into our long-term plan. And then we look at the contract. Yes, we have a contract to manage. We have SLAs we have to deliver to. However, that doesn't mean I can't go to a client and talk about the contract. We have openly had difficult conversations with clients where we're in a position where we are perhaps not making as much money as we'd like to because [ colo ], we've had inflation issues. Every single time we've had that conversation with the client, they've been open to addressing it. That goes back to that partnership that we have developed with our clients. And the same token, they've come to us and said, we're moving faster along the cloud journey. This legacy ITO contract doesn't work for us anymore. Can we do something different? Do we have to wait till the contract's up? Absolutely not. True partnership. We come to the table and we work through it together. All of this really is what drives that over 95% renewal rate. I think Mike, you referenced it, as well as the NPS scores. Key metrics. At the end of the day, I have to measure how we're performing in order to know who's performing and where I might need to make some adjustments. Two key things with this. We've done a lot of training with our sales organization, both mine and Chris' around metrics, what it means, financial acumen, what does the P&L look like, days to close, getting our invoices paid on time. We're really spending a lot of time on a sales methodology. How are we qualifying our deals? Is this a deal that fits the business units demands on or desires on what good looks like. Is it something we think we can win? So the TCV, total contract value. I think most of the people in the room know what that means. But we look at it from a new business perspective. New business is made up of a couple of areas, new logo and then what we call new scope, which is adding on additional abilities in a business unit or bringing on a new business unit that we haven't sold to in the past for that particular client. And then expansion. Expansion is the same service we've already got at a client, but actually expanding into multiple regions or different countries. Average deal size. Deal size vary depending on the offering, depending on the terms of the deal, but we measure it because then it also gives us that predictability for future deals coming through. Qualified pipeline. I mentioned a little bit about it, but we have a rigorous process that determines whether or not going to pursue a deal. Once it's qualified, that's when we start to actually invest resources to help go pursue the deal and what we have to do to go win it. Cycling, again, it varies depending on the deal, a very competitive RFP may take longer to close, 6 to 12 months depending on the size of the client. Chris talked about the point of spear, those are going to close in a shorter time frame. Win rates, we look at both value and count, measure it across the different business units, across the different business types as well as with region. And then lastly, client wallet share. We've talked a bit about that, cross-selling potential. Again, 44%, I think, was the number Mike shared with you that have multiple business units in it today. Obviously, we want to have all of our clients with the majority of our business units, as possible. And then renewal rates. Again, these are just a few of what we measure, but without measuring it, we won't know how we're performing. Okay, I have just 2 quick examples I want to show from clients. This first one, and I won't read exactly what we do there, but it is a DWS client. It's a global technology client. Started in 2016 and it really started in Australia and New Zealand. But as you can see, across the last 6, 7 years, we have expanded outside of those countries into Singapore, Malaysia, Hong Kong and Japan. We process over 20,000 requests annually today. But the great news is we continue to expand even outside of the Asia Pacific region. When we were there visiting with them face-to-face, they're actually introducing us to their team in the United States and Canada. And giving us the ability to bid there. In addition, the NextGen solutions that Joel and Alan talked about, we're bringing that to the table. That's the IoT scope that we talked about and the office expansions or into the team rooms. And then lastly, Chris talked about mid-market. So this is an example of the client that recently signed with us last year. It was their first time outsourcing. So they were very, I'll say, nervous about what that would look like. We really, really worked closely with them. The client said that as a first-time outsourcer, they learned that turning over their services to us actually enabled her and her team to create capacity that they could go do other things with, by giving us the work. The trust that they showed at us now has enabled us to grow that outside of the existing business. Two areas we're working with them on technical design for paperless manufacturing and also data and analytics, which I know Manju talked about in his business unit as well. So just it's one example of a great land-and-expand story. We've had them for less than 12 months. So the fact that they've actually started to share with us additional business is great. It's kudos to the team that we have. We've got over $3 million of pipeline sitting there today and continue to expect additional double-digit growth there. So with that, Deb, I'd like to turn it over to you.

Good afternoon. Thank you, everyone, for joining us today. I'm going to bring it all together and wrap it up here. So I really want to thank you for joining, but also to thank all the presenters here today. I'm sure you'll agree, they did an amazing job laying out the market, our strategy, the excitement behind our NextGen Solutions and our go-to-market strategy, which all will serve as the building blocks for the financial overview I'm about to go through well as the -- our targets for generating shareholder value. Here's the agenda. The items that I'm going to cover. Here we have, what we sometimes call, our who, what, where, when slide. So this is a great slide we show with investors and others to explain where the different revenue streams and the fact that we have highly diverse revenue streams with a large base of recurring revenue. So on the upper left, you'll see the segments, and you'll see that the DWS, CA&I, and ECS segments are all there. And they're all kind of equal share and significant share. And they're all supported by plans for innovation and growth, which you heard here today. For geography, we have more than half of our revenue coming from outside the U.S. and Canada. And from a sector perspective, you'll see we have financial services in the public sector both at about 30%, which are important industries for us. But then we also have about 40% in commercial. So with these 3 circles, I think, demonstrate are somewhat similar to the Finance 101, right, which is a diverse portfolio, reduces risk. So I think what's important to see here is having the diversity by segment, by geography and by sector really provides if there's macroeconomic pressure in one area or the other, the other one can compensate. So I think that's important. Peter talked when he opened up about the recurring revenue. We have more than 80% of our revenue is recurring, which is just an additional layer of confidence in our business. This is just a view of our historical financials as well as our '23 guidance. As a reminder, 2022 had some pressure on the revenue numbers due to both some exiting of nonstrategic contracts in DWS as well as some currency headwinds. You'll also see the 2023 guidance that we laid out after fourth quarter. And you'll see from a revenue perspective, pressure on it from, as you already know, the lower LNS renewals that we have in 2023. This is a key reason why we're also reporting the ex-L&S view, which is negative 1% to positive 4%. The operating margin 2% to 4% and adjusted EBITDA margin 9.5% to 11.5%. We believe we are still on track to achieve these numbers and are therefore reiterating the guidance we laid out -- this guidance we laid out previously. This is an important slide for me and for the company because it really lays out something a big focus for us, which is improving free cash flow, which several people have already spoken about. We began a project a few months ago to really take a deep dive into working capital and cost with the help of a third party, who helped us identify key areas of opportunity. For improving working capital, we discovered a few items that with just a little additional blocking and tackling such as normalizing extending payment terms, we have some opportunity on the accounts payable side. This is in addition to some things we're already doing, but we'll continue to enhance such as some training we do for our salespeople to really ensure that as they're crafting deals and managing collections, that free cash flow is kind of a core focus in everything they do. Mike talked a little bit and the team about the margin expansion, such as the shift of NextGen Solutions revenue as well as cost of delivery improvement. I'm going to talk bit about SG&A as well in a few minutes. There's also the CapEx-light strategy that we've employed a few years ago that really is just us focusing on less capital-intensive service offerings and leveraging our partner ecosystem. And then I'll also spend a few minutes on pension in a few minutes. Before I talk about the SG&A initiative, I just wanted to kind of reiterate and Chris spoke a lot about this. I won't go into too much detail. But it's really as a reminder, from a financial perspective, just the importance from both a strategic and financial perspective of the L&S solutions. We illustrate our commitment to the future of ClearPath Forward by devoting over half of our annual R&D is spent on this and its continuing evolution. As Chris mentioned, over 75% of the ClearPath Forward clients are increasing their workloads. And so this is just another reason why it's critical that we keep investing in this area. So I won't read everything on this chart, but I think it's things you've heard before, mission-critical operating system, decades of long client relationships, 95% retention. And really, growing adjacencies into the SS&C areas that Chris talked about. And then more importantly, from a modeling perspective for you all, we already talked about L&S revenue growing about low single digits in '24 and low double in '25. We're also giving you some color into the average revenue over the next, both 3 years and 5 years, coming in at about $360 million, and that's at about 65% margins over that same time period. Unisys has a proven track record of identifying and reducing costs, and we plan to continue to do that. I also on several occasions, successfully led these types of initiatives in prior roles that I've had. At Unisys, a few years ago, we made a conscious decision to invest more in sales and marketing, to drive revenue, which is -- but it also drove up SG&A over the past few years. We're seeing the results from those important investments and a lot of what you heard here today. But we now need to look and reduce some of those unnecessary costs while maintaining a sharp focus on still continuing to grow the business. We launched an intensive project involving all SG&A functional leaders and their teams with the help from a third party to identify savings that are sustainable and transformational, with the goal of making us a more agile organization. Examples of these are, -- and we identified $50 million of savings. So about $20 million are related to optimizing and streamlining core G&A functions and our real estate footprint. As far as those core G&A functions, it's things such as looking at duplicative responsibilities, leveraging automation and technology better and really just a better allocation of talent overall across those organizations. For our real estate footprint and really looking at ensuring a cost-effective hybrid model and our portfolio rationalization of our real estate. On the upper right is about $20 million that we're looking at for balancing labor location and the labor pyramid. So this is just a continued focus on optimizing and right-shoring our talent resources and also executing on an organizational design that is fit to future growth. Then on the bottom is IT, which is really about -- I think this happens in other organizations as well. Sometimes there's IT organizations throughout as opposed to more centralized. So we're really looking at centralizing those IT organizations within the business, which we think can generate some savings. So all of these things together, like I said, just to make sure that it's clear in the center. We're saying about 1/3 run rate achieved between 23% and 25%. What that means is we're going to start taking actions most likely later in '23 and so those -- when you go into '24, '25, '26, there'll be 1/3 of those showing up, but we'll be achieving them later '23 to show -- give that annualized 1/3, 1/3, 1/3, throughout '26. There will some charges associated with this, which I'll talk about in a few minutes. So on to pension. This is a key element that we really have to focus on when we're looking at overall free cash flow. As you know, with pension, the more liabilities we have, the more volatility there is. And so we're always evaluating opportunities and when it makes economic sense, reducing these liabilities whenever we can. So you'll see here some ways we do that through annuity purchases, lump sums and transfers to multi-client, multi-employer plans. So these are actions we've already taken since 2019 that have resulted in a $3.5 billion or 45% reduction in global liabilities. And then on the bottom right, the gap deficit, a 70% reduction in GAAP deficit, which is partly due to $800 million of contribution we made in 2020 as well as strong asset performance relative to the liabilities. In total, we've transferred about $1.7 billion of global liabilities to third party since 2019 and what's important about this is this is not using company cash, but using the cash within assets from the plan. So we will continue these efforts because it's really critical from that free cash flow perspective to ensure we reduce this volatility and ultimately reduce contributions. This is a chart we showed in Q4 earnings. So you'll recognize it, and it shows the cash contributions that we're expecting throughout the next 10 years, but then we've gone further. So the one difference from what you saw in Q4 is we've gone out to 2036 to show the runoff of our current expectation of the U.S. plans as well as the international plans. So I think there's a few things important about this. One, just as a reminder, these contributions will vary with -- based on market conditions. But I think one thing that's important is that the U.S. contributions don't really start until 2025, which gives us a little more runway to execute our strategy to generate the cash from all the initiatives I discussed. We -- what we did was we worked with our actuaries and advisors to say, okay, here's the contributions. What are the sensitivities of the U.S. plan that -- how we can think about this. So as a reminder, expected cash contributions are most sensitive to asset returns relative to interest rates. And part of that, as I think many of you know, there's the 25-year average concept with the interest rates. So based on the probabilities of potential asset returns and changes in interest rates during 2023, calendar year contributions, the result of this work we did with our advisor may increase -- the calendar contributions may increase about plus or minus $20 million per year is what we found. This is helpful to better understand what this chart might look like. I know that's a question, many of you have asked, but of course, it's important for us to ask as well as we're planning our free cash flow, planning for the future is what this chart might look like at the end of '23 when we provide it to you. A few -- I'm not going to spend much time on this because really, this is just for your purposes, a lot of things we already spoke about, but giving the free cash flow assumptions that would build up to the 2026 free cash flow. One important point, I talked about some of the cost initiatives we're working on. You'll see the fourth box on the right, we're estimating about $40 million in restructuring charges to achieve those SG&A and cost delivery efficiencies. And those will likely be some in '23 as we start actioning those, probably the most in '24, and there could be some -- a small amount that also is in 2025. Okay. So adding it all out. So to summarize the output of all the inputs we just discussed and everything really that you've heard today, these are the resulting financial targets, which we think are challenging but reasonable and demonstrate the strong progress we're making in our transformation. We're excited about the NextGen Solutions growth of about 10% to 15% that's helping drive that 4% to 6% total company growth and 5 to 7 ex-L&S revenue growth. The traditional ex-L&S is just -- is approximately flat to 2% we're anticipating. So clearly, not as much growth of the NextGen Solutions, which is really as the BU leaders talked about their solutions, they really were focused on next-gen solutions, because as Peter and Mike mentioned from the beginning, that really is our focus. But the traditional solutions are still important a lot of times when we're going into deals that they want. That's kind of that point of spear. And sometimes it's how we get into the client with the goal of expanding some of these more NextGen Solutions. On the margin side, the -- our target, and this is the full year 2026 margins. For total company operating margin, we're anticipating 10% to 12% and about 17% to 19% adjusted EBITDA. These are all driven by those factors below. So as we've talked about that shift to more of the NextGen Solutions that were -- to that 45% by 2026, that will drive increased margins because those margins are about 25% on average. And then the traditional margins are lower, but we're doing a lot of work around a lot of that cost of delivery and cost efficiency work on the business unit side is really in those traditional areas. And now we expect to improve about 100 -- 100 or 150 basis points a year. So in total, we anticipate ex-L&S gross margin to be about. Of course, this is all supported by that strong gross margin in the L&S business of 65%. And then on top of that is this SG&A initiative that I've spoken about. So I think it's important to summarize with this is what this would mean for investors and for us as a business. Total company revenue of $2.1 billion to $2.2 billion, adjusted EBITDA of $350 million to $400 million and then cash flow pre-pension of $150 million to $175 million, which equates to about 40% to 45% adjusted EBITDA to free cash flow conversion, which as we go to the next page, it's important to see that based on that chart I showed you before, of kind of that peak pension contribution based on market conditions today would be in that range of being able to cover that with the free cash flow we're anticipating. And then another important point is as that free cash flow increases, the pension contribution will be going down over that time. So I think this is -- this offers a big opportunity for the generation of cash and shareholder value as investors see this kind of inverse relationship in the outer years. And so from an investor perspective, this is where we really see a lot of value. If you recall, we said the scenario analysis said potentially plus or minus 20%. And that could mean minus 20, right, depending on the way the markets move. So there could be some opportunity here. But if it increases 20, we still are somewhat in the range. So that's important for us to understand from a planning perspective. So I'm going to end on this, which is where Peter began, which is an investment in Unisys is an investment in large market opportunity. We've spent a lot of time talking about that. In our Innovative Next-Gen and Industry Solutions, which hopefully you've got a really good flavor for the great leadership we have that are leading these efforts. Highly recurring revenue and a large base of high-quality clients. As we've mentioned before, our top 50 clients have been with us more than 20 years on average. And then really just strong financial management. So the improvement of these ex-L&S margins which is our big focus as well as our big focus on reducing our pension liabilities and managing that obligation. So I just want to thank everyone for coming today. We're not leaving out, we're going to do a Q&A, but just wanted to say, while I'm up here, really grateful for your time. So I'll now ask Peter and Mike to join me for Q&A. And all the leaders who presented are down here at this table, so if certain questions come up, we can direct it to them. We also have Teresa Poggenpohl, she's in the back, our CMO, if you have any questions for her. We have Dwayne Allen, our innovation -- the Head of Innovation. And we have Shalabh Gupta, who is our Treasurer. So they're also available answer any questions. So thank you.

Okay. So everyone who have been already here is still here. Okay. Plus some others. We also have questions that are coming in from the folks joining us externally. How are we getting those, Teresa? Michaela has got them. All right. So my only request is that if you have a question, just kind of raise your hand and somebody will come to you with a mic or if there aren't any mics left, I'll just come to you with this thing. We'll make it work. Rod?

Rod Bourgeois here. Thank you for the presentation and also the responsiveness to feedback from investors to provide certain disclosures that you provided today that really showed up. So I appreciate that. The question, I guess, I have is I'm comparing today to the last Analyst Day, there's been a lot that's happened since the last Analyst Day, including COVID and some legacy contract runoff. And now we're in a bit of a cyclical downturn on top of that. As you look at the targets that you've set today versus the targets that you set at the last Analyst Day, what have you learned from the last experience and the last couple of years? And what's giving you the confidence in setting these targets? Clearly, the free cash flow numbers to cover the pension overhang, it's encouraging that your outlook includes enough cash flow to cover that. But can you talk to the main things that are giving you the confidence in those free cash flow numbers in your outlook?

Rod, thanks for question, appreciate it. I think the first thing I would mention to you, when we set those targets in '21, obviously, it was pre some of the things that you had mentioned. But when we look at our long-term plan now and we go back to what it was then, I think most of foundational elements embedded in the long-term plan are actually very consistent. We didn't have a crystal ball back then. We didn't know how our solutions were going to develop. We certainly didn't know how the uptake was going to happen, and we certainly didn't know the pandemic was about to be upon us and all of those things. So when I look at the plan today, I look at it through the lens of, it's frankly about a year delayed from exactly what we thought in 2021 when we laid those out. So if you track it in that manner and you pushed everything basically a year to the right, it's pretty much right on track with where we were going. So that gives us a lot of confidence. I think the take-up that we're seeing in the new solutions gives us a lot of confidence. Some of the entry into the new markets give us a lot of confidence in that. None of that was predicated on the transformation that we had in our selling community. None of that had the advertising and marketing campaigns behind it. So I think there are so many ancillary things that speak to the good, but the core foundation, the growth rates, and every other aspect of that buildup and it's a bottom-up build when we do those long-term planning cycles, is actually very consistent and on track. And until the solutions were ready to get to market, it's a little difficult to take that market share. And you nailed the last piece of it. We weren't sure how clients are going to react to the renegotiation of contracts. And we've actually had more success than we thought we were going to have. We were actually anticipating some of those contracts that just have to run off. Not only did they not run off, we were actually early renew and increased pricing. So for the contracts that we had to divest, they're gone for the contracts that we were concerned about that had some runoff time to them. They're behind us, and we've actually gotten to a point of either renewal at a new rate or an early renewal at a new rate. So those margin profiles are in the bag. And you saw our expectations on the growth from a top line perspective. We've been using the term challenging but reasonable. A 3% increase in NextGen solutions basically consecutively over the next 3 years is what we're talking about. Also in '21, when we put those targets out, the traditional business was flat to negative. Now the traditional market is essentially 0 to 4, right? So we're seeing growth in the space that was actually the drag on that plan. So all of that coupled gives us a good deal of confidence in how we set those numbers. And I think we've got a track record of being able to execute against that.

Just a quick follow-up there. So the traditional business now having an outlook for positive growth, whereas before, it was negative. What's the main factors that are -- that have changed where your traditional business is now on a growth trajectory?

Yes. That wasn't necessarily indicative of Unisys, I'm saying the market in general was negative and declining. And I think we've talked about this in the past that the view and the promise of cloud and the view and the promise of everything being in the cloud has the pendulum swung back a little bit. And so there's an element of the hybrid infrastructure, and there's an element that is actually growing, right? And we're working with partners. We're engaged with Dell and their APAC strategy as an example, right, about a repatriation from cloud to traditional. And whether that's traditional in the sense of an on-prem scenario or it's traditional in the sense of colo or even a private cloud scenario, those are the elements that I think are driving that underlying basis. And as you heard me talk earlier, that is still a gateway to NextGen from our point of view. So there is a focus on growing that traditional base and using that as a land and expand and then using that as a cross-selling opportunity. So again, all of those, I think, bode well for us and they are in the favor of supporting that underlying thesis.

So just a follow what Mike said, because I agree completely. There's probably one element in what you saw today that in my perception, at least, is different, kind of trajectory-wise and in a pretty fundamental way from what we showed in early '21, which was back then. And it's interesting. I'd like to say that we were really aggressive in getting there. But sometimes, you have to be patient, and you have to wait for the market to come to you. And that's around the ECS presentation. So there that -- we really didn't have that element of the value proposition 2 years ago. So what do I mean about waiting for the market to come to us. And then there is a bit of aggressiveness in that as well, so I'll explain both. ECS has always had this really, really strong value proposition around ClearPath Forward, and you heard that it still exists. So the challenge has always been what do you bring from that group of engineers that can challenge that level of value because they've always been really busy doing ClearPath Forward work. And it was really the combination of 3 things that really had happened post 2021 that has resulted in the description and the presentation you saw today. So what were the 3 things? Well, first of all, a lot of development around quantum computing. The quantum annealing that Chris Arrasmith talks about was not nearly it existed in name, but it didn't really exist in reality 2 years ago. It really exists in reality today. This is real quantum computing. That's number one. Number two, you could have that computing power, but do you have the algorithms to actually make it useful. So the other thing that while existing in name 2 years ago around artificial intelligence did not have near the vibrancy that it has now. So you have the advent of, what I would call, more vibrant artificial intelligence, you have the advent of quantum computing. And then you have, and I'll say this -- this is the more aggressive part, a real change in our focus around ECS. Chris Arrasmith's joining the company, bringing people with him, hiring people, have really said, we get what we have, but -- and we're going to keep it going and powerfully for the next 30 years. You heard that from him. But we're also going to take it to the new level because we have tools that we never had before. And so I consider that the more aggressive part, which means we have leadership that is determined to do that. But in fairness to the older leadership, they didn't have these tools, but this leadership has these tools. So I think that is a difference Rod. But I agree with Mike, and you're -- it will -- you're seeing some of that revenue and the numbers that Deb showed, but there's more that we can do with that over time.

Just one last thing, Rod, on that, and I'm going to on the point of ECS. Embedded in what you've seen even through '26, we're not just saying, "oh, it's all coming from that, right?" There's a modest component of what you're seeing in those plans. And I think you saw the power of what that solution can actually be, which could be massive. But we didn't get there in this plan by counting on this massive uptick from that solution.

I guess 2 questions. First, I'm curious you guys have highlighted focus on mid-market. And I want to understand why hasn't that been a focus in the past perhaps? Or what about it is attractive in particular today? I'll start with that.

I'll start that, I guess, and then I'll give it to Mike and then we can continue with Chris. Again, it's somewhat the market and it's somewhat personnel. I will tell you that Chris Wenzel joining the company, she's got a ton of experience in this mid-market. And so mid-market is a little different. By the way, we call it mid-market companies, $2 billion to $5 billion, but they're pretty big companies. But for us, it's mid-market. And you really do have to approach it somewhat differently. Again, I think some of it is that company evolving. And I think that if you go back a number of years, we customized our solutions too much, even larger solutions. One of the great values to the company, among others, that Mike has brought is this discipline around we really, really are serious about leveraging our solutions. We -- 2 years ago, frankly, we didn't have even the view that you guys have seen in terms of focusing on the leverageable solutions we do now. So the part of it is we have come to a place where we can leverage those solutions. We've come to a place where we've got talent that knows how to attract the sales executives and the processes we need to hit that mid-market. I think -- but there's 2 other elements. And one other element is we have confidence, and I think Deb brings this, that we have the financial discipline to actually make money and cash flow with those solutions. So you do have to be careful that the cost of sales or the cost of design doesn't swallow up a $2 billion to $5 billion company's budget from our standpoint. So I think we've got more disciplined, thanks to Mike. We've got the personnel, thanks to Chris. We've got the financial acumen thanks to Deb. And then the last item I think the market has changed. I think the market is so glutted with companies that need to show revenue growth at the higher clients, we'll get our fair share of those. But I think we have decided there is another place that we can play because we do have, and I think you heard it throughout, you heard it particularly from Lisa, we have really strong client relationships and mid-market companies get that. They get the value of that. And so I think we're confident this is going to be successful, but it is relatively new for us. Deb, any thoughts on that?

I was just going to add that in yesterday's industry analysts meeting, we had a customer panel. And one of the customers is a mid-market company. I found a interest that she said when they were doing their RFP, they basically limited it to just mid-market size providers because for them, they didn't want to go with a bigger company where they felt like they would just be a number, right? And so I think that's one of the reasons we're focused on mid-market and something that I thought was just an interesting comment by her.

Interestingly, that company, which when they signed with us, was within that revenue range is no longer. So they have grown out of that size, which is cool. Mike, any thoughts?

Yes. Look, I think you summed it up pretty well. But , I would say even 2 years ago, there was -- we had no ability to do what we're doing in the mid-market. Teresa and I had actually talked about it for several years about we really felt this was a good market to approach. We've done a lot of research on it. We've looked at our hypothesis of basically 10 different attributes that we thought were important in that market. But Peter has really nailed that the DNA was not there for the go-to-market motion, the volume that it was going to take, the quick selling motion, the standardization of the offerings. I mean we really had to take it from solution development all the way up to sales and go to market and make sure all of those pieces were in line before we can get into the go-to-market. And that's really the honest truth is there's 0 chance that we could have done this 2 years ago, although it was in our mindset 2 years ago, and we've just gotten to the point of our maturity that we could attack this market. And then with the digital campaign, we felt that this was the best time to do it because we could really get after this market with almost no incremental spend.

The second question I had is, the mix between the traditional solutions and the NextGen and clearly between growth and also profitability. The more you can shift faster to NextGen, the better. So what are the limiters on that and the ability to push even harder and faster in that direction?

So I'll take that to start. And Deb mentioned that, the traditional part of our business often feed the NextGen. So I think, as Joe and Alan, were in that discussion, not -- it is true that we get some clients that start as NextGen clients. But it is also true for our existing base as well as for clients that we're attracting, they're coming in with kind of a combination of both. And it's not that we're not ready with the NextGen, but there are simply some things that there are some clients that want the cheapest, lowest, simplest way to do it. And they're not ready to kind of take that evolution, but we think that they will. So Joel, I don't want to speak for you. So maybe you could talk about -- we actually do a culling when we look at our pipeline of clients that are not yet clients and that want some combination of traditional and when we go after them and when we don't.

Yes. I'll use one of panelist from yesterday, right, in Unilever as the customer itself, right? They have -- we have a large field services where our techs go out. They're on the floor. They do the work. They may go out to certain locations. That's still traditional business. And it will always be because that's a human element in it. But they're very more much into the experience, into the persona and that still makes up an aspect of that contract. So I think Peter's spot on in the sense that we see the multiple flavors. We certainly will get a pure NextGen and we're working really hard to improve the margin profile of even that traditional with the technology and the tools that I was mentioning up there.

Yes. I wouldn't say that we have a barrier to -- if we can move that 10% next year, we would do 10% next year, right? It's really about the take-up rate. It's about the time it takes to get to market. As you know, a lot of these contracts are 3, 5 and 7 years in duration. So there's just so many that are coming up at a time. It is another reason why we think mid-market is pretty attractive, right? Because we can churn that quicker. We can get the proof out there quicker. We get new logo quicker here. We see the expand capability there. And as we're kind of say, I won't say, waiting for contracts to come up for opportunity, and there's always a list coming up every year, and we're certainly aggressively attacking that list, but there's just -- there's limits to how much we can digest in a single year. But again, not from our ability to deliver, more from what's available the market.

That's right. And I think the dynamic that Joe and Mike are talking about happens in CA&I as well. We talked about the cloud and the cloud is really important as a growth engine, but there is still a lot of revenue in infrastructure. And there is even more revenue than one would think because some companies I have been revisiting their mix of how much do they want public, how much do they want in third-party colos, how much they want in a private. So that hybrid balance for some companies is shifting a little bit. And we want to maintain a vibrant ability to help those companies that want a real hybrid portfolio, which includes some traditional infrastructure. Manju?

You are bang on, Peter. I think if we have to give some examples, I think we're seeing the shift happening in the market given that most of these large enterprises are moving to -- from traditional to the cloud, right? It doesn't mean that the mix shifts right away, it takes time, because these foundations that need to be laid out, the future platforms that need to be laid out takes time. And as we're doing this, it goes from an RU-based model. Like think of workloads moving from the existing base of your traditional to the cloud. When that happens, obviously, there is going to be some decommissioning of the workload from a traditional. And now we are moving to a consumption-based model. And we're dabbling with multiple like consumption models today. It's not unique to just us. You can talk to even our aspirational fields for the analyst and advisors. They have the same challenge, too, right? So when we start moving into a workable model in terms of consumption, we'll also start looking at what are the project areas that we can get in. Yes, we were managing the infrastructure layer. And one of the case studies we talked about where the CIO threw us a challenge of start working with the application teams, start working with the business team, these become our projects where we go through this agile transformation for DPN or your NextGen Solutions. Hopefully, that makes sense.

I had 2 questions, one on pension and one on L&S. On pension, Deb, can you flip to the sensitivity table and contrast numbers in the sensitivity table and then in the middle seemed to be much lower than what the cash contribution commitments are. So how should we read that? Is that the way to think of the economic value of the liability versus the -- just the actuarial spread?

I don't know if Jeff is still -- if we want to put the slide up or I know it in my head, too, I can just talk to you. But I think if you're talking about the bottom chart, the one with the contributions, where there's a $630 million in the middle box, is that what you're referring to?

Right.

Yes. Okay. So the $630 million is basically equivalent to the $650 million on our Q4 chart of the U.S. contributions, but it's adjusted for the annuity purchase that we did in March, which reduced those contributions by about $20 million. If you remember in Q1, we said that the $650 million had gone down to about $570 million, $580 million. The one part of that reason was because that annuity purchase, it took down those expectations on contributions. So we thought for that exercise, it was important to start at that $630 million. Does that answer?

No. More specifically, if you sum up the contributions on the slide in the main presentation, it comes out to much more than what's in the sensitivity table?

Well, if you look at the U.S., the sensitivity was just on the U.S. piece. And so I think that's maybe the piece. I apologize I misunderstood your question. Yes, it's just that the U.S. contributions are $650 million. Is that right? Did I...

And Amit, that is great. We have Shalabh here, and I think we can maybe afterwards, join the cocktail hour perhaps that sounds [indiscernible] to go. For those of you online and those of you in the room who are wondering what that slide was because it wasn't one of the slides in Deb's main presentation. That is a slide that is in the appendix.

Yes, 122.

There we go. Give or take.

And the second question on L&S. You -- we're talking about the $360 million sort of normalized run rate and a 65% gross margin. Can you give us some clues as to what we should think of as operating margin? One is, and two, if we see the number go above $360 million or below $360 million, should we think that we're either borrowing from the future or that we are reserving and are not going to get something back in the future? Or should we think of a drop or an increase is something more meaningful?

Yes. I think as far as -- I don't think we've given operating margin for L&S, but I can -- it's something we can consider maybe talking about on our -- another call, but we haven't given that out. But I think as far as the timing, if you see, there are ups and downs as far as the timing. It's an average of 360. So there will be some fluctuation, which is really, as we've talked about before, hard to predict. The book of business is stable -- is fairly -- we've good visibility. But as far as exactly when deals close, it's not always easy to predict. Does that answer your question?

Yes. I would say, , that if you see it fall under that, my first assumption would be it's just a low renewal year. So there are less contracts due to be renewed in that year and vice versa, if it's above, it is a higher renewal year, and it should be in that. The borrow forward is not really something that we drive. Typically, Chris mentioned that there is increased consumption. You get clients that are near the end or close to our renewal. They've used their -- a lot of consumption. And typically, our contracts stipulate that once you do that, you lose your discount and you pay full rack rate for future consumption. So they are trying to accelerate that contract renewal cycle. So that's why that pull forward happens. Typically, it's to satisfy a client need for an early renewal, but again, when those types of things happen, Deb and team will kind of always have that dialogue externally with you because that's not normal. But just that oscillation above and below the 360, I would say, low renewal year or high renewal year, just a number of contracts that are due for renewal.

So just to close that point, and I'm not asking you to confirm these numbers, but let's say, I was assuming a 40% operating margin on the business and it translated to $150 million or so per year. And I wanted to put a 6x multiple on that number because it's, I guess, not growing but relatively stable. Then it would be fair to value that business given my assumption is $900 million?

We will let you do the valuation, not really what we do.

There a lot of legal people looking at you.

Thank you.

I gave you a caveat.

Yes. But I think it is important to note as we've said that we have fairly good visibility, and that's we gave a 3-year and a 5 year to let you know that what we're anticipating is over both of periods. And I think we have -- because these businesses are running, they're mission-critical operations on it, they typically won't come to renew and say, we're not renewing that. So I think that's -- given that average, there's some good level of confidence that, if to Mike's point, if you see up and down, it's typically not we lost that deal because we have pretty good visibility into that. They would typically need a 3-year transition to -- Chris? Or 2 to 3 even longer to transition off of that. So in looking at our renewals, it's a pretty good visibility that we have. If that helps?

Just wanted to -- on the L&S business and then ClearPath, is there -- can that business exist separate from the rest of your businesses? And how much -- and if it cannot, is it primarily because of the overlap of the traditional business and I guess, is there a period in time a year out or 2 years out when more of the workloads have transitioned to NextGen that you can actually consider a separation of ClearPath?

Well, that's really almost a spiritual question in the sense that we are an operating company, we're not really a holding company. And I think one of the important things that I just want to focus on, it's really started with what Mike's comment was that 40% of our clients will use more than one of those business units. And what we have found as we have done the analysis is, when a client uses more than one client. We tend to be -- the client satisfaction goes up and our profit goes up. And it's really obvious, it's not nefarious at all, but you get rid of a bunch of sales costs, right? You get rid of the uncertainty of having to do that because you can cross-sell. The client benefits from eliminating all those sales costs, and we benefit. So there is real value for us. And then as Mike mentioned, we've gone from about 33% to about 40%. The second thing I would say on that is the kinds of things that Chris is talking about is actually not technically ClearPath Forward, right? I mean, as Chris mentioned, but it is using the engineering skill. It's using the methodology. It's using the data. It is using a lot of the experience that we've gotten and the know-how from having used that. So one of the questions that your question raises is, okay, well, that is an important part of our future. If you simply sold ClearPath Forward, how would you retain that part of our future. And if you sold ClearPath Forward and you sold that, then would you be removing some of the brighter higher-margin opportunities. So the bottom line is I think we really operate as an operating company not a holding company. And I hope that we didn't give the impression here that these are stove pipes. I think several -- I think every one of the speakers mentioned leveraging other parts of the business, and that is important to us.

Just one comment there. Unlike some of the other businesses where we saw traditional and NextGen, ClearPath Forward in ECS is traditional, right, in that construct. So you're not cannibalizing that by going to NextGen. It is a completely separate work stream. So there's really no overlap there.

Got it. One more and this is more in terms of trying to potentially accelerate your transformation. Are there any assets or I guess, workloads or product functions that you can theoretically divest? You made a bunch of acquisitions in the last few years. Are there any opportunities to accelerate the transformation by potentially divesting?

So that's a great question, too. And it is certainly something the company has done over time. We've done it during the tenure that Mike and I have been here, we've done it before our tenure. And I would say that we're constantly looking at units or parts of the business that are underperforming. And I think a healthy business has to be willing to do that. A healthy business has to be willing to look at its people in the eye and say, here's our expectations that if you're not meeting those expectations, you run the risk of falling off the company and being part of a divestiture or you might be in the opposite situation, where you have a piece of the business that is so highly valued because it is doing so well, then moving that business off gives you such an infusion that it really creates additional value in the rest of the company. So what I would say is we do actually look at that throughout the company. Do we have any current plans to do that? We don't, but it doesn't mean that we don't constantly look.

I think each of our business units has a modern set of solutions as well as traditional. And again, we look at that traditional as a feeder system to get to modern. And I think we're pretty happy with the asset portfolio that we have. Took us several years to get it where we want it. So we'd like to enjoy it for a while.

That said, I just want to -- one of the things that our teams are looking at, Deb mentioned labor rationalization. And that is part of how we look at our cost structure. And that includes looking at people who have Unisys badge versus contractors. And all of our industry works with the combination of associates or employees and contractors, and we're actively at areas where we might have too many of one or not enough of the other depending on the workload, depending on the geography. So it's not quite the same as selling a business, but it does mean kind of optimizing the way we deliver those services, and that is underway. Great question. Thank you. Michaela, any questions from out there?

Yes, we have a question from the chat. To what extent do you need labor cost reductions to achieve your 20% ex-L&S gross margin target for '26? How does labor flexing up or down plan to the gross margin equation?

Yes. So I think as far as the gross margin, I think there's definitely a labor element to that. I think as Peter just talked about, I think he may have answered some of that. Looking at contractors, overall labor looking at the labor pyramids or some of the things we talked about, right shoring. So all of that does have a people element to it on both the gross margin side as well as on the operating profit with SG&A and some of these other cost areas we're looking at.

I mean I know it's a weird visual, but I would go back to the visual of Chris Arrasmith's presentation about how you fill up those cargo containers efficiently. We're actually doing that with a personnel analysis, right? How often do we have people in what roles and what is the most effective use of resources, some of them maybe our resources, some of them may be resources that we bring in on a full-time basis or on a temporary basis. So that optimization work that we talked in air cargo is work that we're doing underway right now. And we do expect that some of the value of that will get included in some of that gross margin increase.

Yes. Just remember, too, some of that gross margin is via automation, right? It's creating capacity, it's not really flexing labor, it's growing without adding labor, right? So there are a couple of elements to that, that go beyond just the labor pyramid.

And one of the -- I know Joel and Alan talked about it, but when you think about some of these new technologies, the poster child for our industry is going to be DWS, where not only do we think it will reduce some of our costs, we think it will actually increase some of the revenue available to our clients. And that's value add we make as well for them.

I'm just curious how material the mid-market expansion is? Is it hitting this year 10% to 15% NextGen by '26 -- the sort of that CAGR target? Because I think of mid-market as being less capital efficient. So maybe the same people chasing the same head, but it's a lower -- probably lower ACV. So how do you -- you're reducing SG&A by 11% to that $50 million, you're entering the mid-market, but then you also have margin expansion in this 10% to 15% CAGR.

So I think, Mike, that probably you or Chris' question.

Yes. The first short answer is it's not material in meeting on here. We think there's certainly more upside than downside in relation to the mid-market. I would tell you, at least from the analysis we've done and what we've seen happen already in reality, the margin profile on the mid-market and the mid-markets' ability to have budget and spend on the things we're talking about is as strong as it is in the large commercial space. So we're not seeing a price pressure and/or, as I mentioned, an additional cost element, at least as far as the hunting is concerned. Now certainly, as we start to convert, if the volume comes up and you have a lot of volume as far as the selling process is concerned that could drive some of that increased SG&A component of it. But that short time one term, right, as opposed to the longer term and the growth aspect of the mid-market. And again, as a proof point for some of those new logos, they've been pretty strong. And remember, our mid-market view is $2 billion to $5 billion, that's a pretty good sized company that can handle the margin profile.

Chris?

I actually don't have anything additional to add to that. I think you covered all the thoughts I have.

I think one thing just to add on that is for the mid-market thing, we're going to be really careful on how we are selling that as far as that it can't -- how customized it is and I think for it to be successful, we really need to watch on the cost side and ensure we're not taking that to your point, it's smaller to begin with. So we don't want to -- we need to make sure on the cost that we're not over customizing everything and then it really doesn't.

Yes. That is a wonderful point. And I should have mentioned it, we tease it out a little bit. And the analogy we use internally is it's not a Baskin-Robbins sale, right? We don't -- it's not 36 flavors. We're going Neapolitan here. There's 3 elements to that. But we've talked about the innovation throughout our stack. When you go to the mid-market and you've got the innovation at every layer of the platform, as Manju was mentioning, they're getting the innovation of our partners. They're getting our innovation, they're getting the innovation of the clients in the aggregate. So our goal there is there's plenty of variety. We want a more standardized solution, which allows us to price it in a much quicker manner. And for them, if you think about who their competitors are, for them to get cost efficiency and for them to get talent to actually do it themselves in this market, they're way priced out of doing that on their own. So it's a variety, it's speed and it's standardization with some level of, I'll say, localization and customization, but not like we do for large enterprise contracts.

I just want to be -- want to make sure that the team here and on the web understand, it's not new new to us, right? I mean Deb gave an example yesterday, we had one of our 4 client representatives here, was a mid-market when we signed them, okay? I was in the U.K. last week on a prospect call for a company that is a mid-market in the U.K. So it's not like we don't currently sign clients that are less than $5 billion of revenue, right? It's really a question of focus and saying, okay, we're going to do more of that, and we're going to make it more programmatic. It's not a -- it's not like we don't do it today. One of the things that gives us confidence we can do it more programmatically is that we have been successful in that marketplace. Now when we turn that programmatically, we have to do it a little differently. We have to do sales a little differently. But again, it's not new new, right? It's just focus on something that we've already done.

I'll add to that then. And with regards to that, when we really think about, we do have that space, but as I come in and work with the teams, it's really about simplifying how we do our proposals, how we leverage our teams, how we train our associates to speak the mid-market language. And those sales cycles can be shorter, which is actually a good thing for our organization because we're not leveraging as many people internally and not using as much time in order to chew through the sales cycle.

Do we have any other questions? Otherwise, we will wrap up. Look, I want to say thank you to each of you who attended in person and via the web. We really appreciate, as I said, at the beginning, those of you who have followed us for a while, we also really appreciate those of you who are just beginning their journey and understanding the story. It is just as we pride ourselves on developing those long-standing relationships with clients, we do the same with our investors. So you will find us very responsive, you'll find very open. You'll find us very willing to spend time with you. We're very proud of the company we have. We are celebrating a 150-year anniversary this year. And as you heard from several of the speakers, we have really strong views of how we're going into the future. We want to share with -- those with you and we thank you for being part of our journey. So with that, thanks very much.