General Dynamics Reports Second-Quarter 2025 Financial Results

Rhea-AI Summary

General Dynamics (NYSE: GD) reported strong second-quarter 2025 results with revenue reaching $13 billion, up 8.9% year-over-year. The company achieved diluted EPS of $3.74, a 14.7% increase, while operating earnings grew 12.9% to $1.3 billion.

The quarter showcased robust performance with operating margin expanding to 10.0%, a 30-basis-point improvement. Cash flow was particularly strong at $1.6 billion, representing 158% of net earnings. The company's book-to-bill ratio reached 2.2-to-1, with total orders of $28.3 billion and a substantial backlog of $103.7 billion.

Positive

• Revenue growth of 8.9% year-over-year to $13 billion
• Diluted EPS increased 14.7% to $3.74
• Strong cash flow of $1.6 billion (158% of net earnings)
• Operating margin expanded 30 basis points to 10.0%
• Impressive book-to-bill ratio of 2.2-to-1 with $28.3 billion in new orders
• Substantial backlog of $103.7 billion with total contract value of $161.2 billion
• Reduced total debt by $897 million

Negative

• Significant total debt of $8.7 billion remains on balance sheet

Insights

Defense Industry Financial Analyst

GD delivered strong Q2 2025 results with impressive revenue growth, margin expansion, and exceptional order intake, positioning it well for continued growth.

General Dynamics has delivered robust financial performance in Q2 2025 with $13 billion in revenue, representing a 8.9% year-over-year increase. The company's diluted EPS reached $3.74, climbing 14.7% from the year-ago quarter, demonstrating effective cost management and operational efficiency.

The 10.0% operating margin represents a 30-basis-point expansion from last year, highlighting improved profitability across operations. This margin improvement, coupled with the fact that all four business segments achieved growth in both revenue and earnings during the first half of 2025, indicates strong execution across the company's diverse portfolio.

What's particularly impressive is the exceptional order activity reflected in the 2.2-to-1 book-to-bill ratio. This means General Dynamics received $28.3 billion in new orders during the quarter while generating $13 billion in revenue. The defense segments performed even better with a 2.4-to-1 ratio, while aerospace maintained a healthy 1.3-to-1. This order momentum has pushed the backlog to $103.7 billion with total estimated contract value reaching $161.2 billion, providing substantial visibility for future revenue.

Cash generation was equally strong at $1.6 billion, representing 158% of net earnings, which enabled the company to reduce debt by $897 million while still paying $402 million in dividends and investing $198 million in capital expenditures. The balance sheet remains solid with $1.5 billion in cash and equivalents against $8.7 billion in total debt.

The strong performance in Marine and Aerospace segments highlights General Dynamics' continued success in key defense markets and recovering business jet demand. With this momentum in orders, backlog, and cash flow, the company is well-positioned for sustained growth in the second half of 2025 and beyond.

• Revenue $13 billion, up 8.9% from year-ago quarter
• Diluted EPS $3.74, up 14.7% from year-ago quarter
• $1.6 billion cash from operating activities, 158% of net earnings
• Very strong order activity in Marine and Aerospace segments

RESTON, Va., July 23, 2025 /PRNewswire/ -- General Dynamics (NYSE: GD) today reported second-quarter 2025 operating earnings of $1.3 billion, or $3.74 per diluted share (EPS), on revenue of $13 billion. Compared with the year-ago quarter, revenue increased 8.9%, operating earnings increased 12.9%, and diluted EPS increased 14.7%. Operating margin of 10.0% was a 30-basis-point expansion from the year-ago quarter.

"During the first half of the year, each of our four segments achieved growth in revenue and earnings, with margins on a companywide basis expanding 50 basis points over the same period last year," said Phebe Novakovic, chairman and chief executive officer. "Our strong cash flow and healthy backlog position us well to have a good second half."

Cash and Capital Deployment

Net cash provided by operating activities in the quarter totaled $1.6 billion, or 158% of net earnings. During the quarter, the company paid $402 million in dividends, invested $198 million in capital expenditures, and reduced total debt by $897 million. The company ended the quarter with $8.7 billion in total debt and $1.5 billion in cash and equivalents on hand.

Orders and Backlog

Consolidated book-to-bill ratio, defined as orders divided by revenue, was 2.2-to-1 for the quarter. Book-to-bill was 2.4-to-1 for the defense segments and 1.3-to-1 for the aerospace segment. On a companywide basis, orders totaled $28.3 billion. Backlog at the end of the quarter was $103.7 billion. Estimated potential contract value, representing management's estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $57.5 billion. Total estimated contract value, the sum of all backlog components, was $161.2 billion.

About General Dynamics

Headquartered in Reston, Virginia, General Dynamics is a global aerospace and defense company that offers a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapons systems and munitions; and technology products and services. General Dynamics employs more than 110,000 people worldwide and generated $47.7 billion in revenue in 2024. More information is available at www.gd.com.

WEBCAST INFORMATION: General Dynamics will webcast its second-quarter 2025 financial results conference call at 9 a.m. EDT on Wednesday, July 23, 2025. The webcast will be a listen-only audio event available at www.gd.com. An on-demand replay of the webcast will be available by telephone two hours after the end of the call through July 30, 2025, at 800-770-2030 (international: +1 609-800-9909), conference ID 4299949. Charts furnished to investors and securities analysts in connection with General Dynamics' announcement of its financial results are available at www.gd.com.

This press release contains forward-looking statements (FLS), including statements about the company's future operational and financial performance, which are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "forecasts," "scheduled," "outlook," "estimates," "should" and variations of these words and similar expressions are intended to identify FLS. In making FLS, we rely on assumptions and analyses based on our experience and perception of historical trends; current conditions and expected future developments; and other factors, estimates and judgments we consider reasonable and appropriate based on information available to us at the time. FLS are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. FLS are not guarantees of future performance and involve factors, risks and uncertainties that are difficult to predict. Actual future results and trends may differ materially from what is forecast in the FLS. All FLS speak only as of the date they were made. We do not undertake any obligation to update or publicly release revisions to FLS to reflect events, circumstances or changes in expectations after the date of this press release. Additional information regarding these factors is contained in the company's filings with the SEC, and these factors may be revised or supplemented in future SEC filings. In addition, this press release contains some financial measures not prepared in accordance with U.S. generally accepted accounting principles (GAAP). While we believe these non-GAAP metrics provide useful information for investors, there are limitations associated with their use, and our calculations of these metrics may not be comparable to similarly titled measures of other companies. Non-GAAP metrics should not be considered in isolation from, or as a substitute for, GAAP measures. Reconciliations to comparable GAAP measures and other information relating to our non-GAAP measures are included in other filings with the SEC, which are available at investorrelations.gd.com.

 

EXHIBIT A CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
	Three Months Ended				Variance
	June 29, 2025		June 30, 2024		$			%
Revenue	$                       13,041		$                       11,976		$     1,065			8.9 %
Operating costs and expenses	(11,736)		(10,820)		(916)
Operating earnings	1,305		1,156		149			12.9 %
Other, net	15		18		(3)
Interest, net	(88)		(84)		(4)
Earnings before income tax	1,232		1,090		142			13.0 %
Provision for income tax, net	(218)		(185)		(33)
Net earnings	$                          1,014		$                             905		$        109			12.0 %
Earnings per share—basic	$                            3.78		$                            3.30		$       0.48			14.5 %
Basic weighted average shares outstanding	268.1		274.1
Earnings per share—diluted	$                            3.74		$                            3.26		$       0.48			14.7 %
Diluted weighted average shares outstanding	270.9		277.7

 

EXHIBIT B CONSOLIDATED STATEMENT OF EARNINGS - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
	Six Months Ended				Variance
	June 29, 2025		June 30, 2024		$			%
Revenue	$                       25,264		$                       22,707		$     2,557			11.3 %
Operating costs and expenses	(22,691)		(20,515)		(2,176)
Operating earnings	2,573		2,192		381			17.4 %
Other, net	36		32		4
Interest, net	(177)		(166)		(11)
Earnings before income tax	2,432		2,058		374			18.2 %
Provision for income tax, net	(424)		(354)		(70)
Net earnings	$                          2,008		$                          1,704		$        304			17.8 %
Earnings per share—basic	$                            7.48		$                            6.22		$       1.26			20.3 %
Basic weighted average shares outstanding	268.6		273.8
Earnings per share—diluted	$                            7.40		$                            6.14		$       1.26			20.5 %
Diluted weighted average shares outstanding	271.3		277.4

 

EXHIBIT C REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS
	Three Months Ended				Variance
	June 29, 2025		June 30, 2024		$			%
Revenue:
Aerospace	$                    3,062		$                     2,940		$             122			4.1 %
Marine Systems	4,220		3,453		767			22.2 %
Combat Systems	2,283		2,288		(5)			(0.2) %
Technologies	3,476		3,295		181			5.5 %
Total	$                  13,041		$                   11,976		$          1,065			8.9 %
Operating earnings:
Aerospace	$                        403		$                        319		$               84			26.3 %
Marine Systems	291		245		46			18.8 %
Combat Systems	324		313		11			3.5 %
Technologies	332		320		12			3.8 %
Corporate	(45)		(41)		(4)			(9.8) %
Total	$                    1,305		$                     1,156		$             149			12.9 %
Operating margin:
Aerospace	13.2 %		10.9 %
Marine Systems	6.9 %		7.1 %
Combat Systems	14.2 %		13.7 %
Technologies	9.6 %		9.7 %
Total	10.0 %		9.7 %

 

EXHIBIT D REVENUE AND OPERATING EARNINGS BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS
	Six Months Ended				Variance
	June 29, 2025		June 30, 2024		$			%
Revenue:
Aerospace	$                    6,088		$                     5,024		$          1,064			21.2 %
Marine Systems	7,809		6,784		1,025			15.1 %
Combat Systems	4,459		4,390		69			1.6 %
Technologies	6,908		6,509		399			6.1 %
Total	$                  25,264		$                   22,707		$          2,557			11.3 %
Operating earnings:
Aerospace	$                        835		$                        574		$             261			45.5 %
Marine Systems	541		477		64			13.4 %
Combat Systems	615		595		20			3.4 %
Technologies	660		615		45			7.3 %
Corporate	(78)		(69)		(9)			(13.0) %
Total	$                    2,573		$                     2,192		$             381			17.4 %
Operating margin:
Aerospace	13.7 %		11.4 %
Marine Systems	6.9 %		7.0 %
Combat Systems	13.8 %		13.6 %
Technologies	9.6 %		9.4 %
Total	10.2 %		9.7 %

 

EXHIBIT E CONSOLIDATED BALANCE SHEET DOLLARS IN MILLIONS
	(Unaudited)
	June 29, 2025		December 31, 2024
ASSETS
Current assets:
Cash and equivalents	$                           1,523		$                           1,697
Accounts receivable	3,613		2,977
Unbilled receivables	8,412		8,248
Inventories	9,889		9,724
Other current assets	1,629		1,740
Total current assets	25,066		24,386
Noncurrent assets:
Property, plant and equipment, net	6,556		6,467
Intangible assets, net	1,437		1,520
Goodwill	20,876		20,556
Other assets	2,953		2,951
Total noncurrent assets	31,822		31,494
Total assets	$                         56,888		$                         55,880
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt	$                           1,204		$                           1,502
Accounts payable	3,078		3,344
Customer advances and deposits	10,678		9,491
Other current liabilities	3,419		3,487
Total current liabilities	18,379		17,824
Noncurrent liabilities:
Long-term debt	7,508		7,260
Other liabilities	7,421		8,733
Total noncurrent liabilities	14,929		15,993
Shareholders' equity:
Common stock	482		482
Surplus	4,173		4,062
Retained earnings	42,695		41,487
Treasury stock	(22,975)		(22,450)
Accumulated other comprehensive loss	(795)		(1,518)
Total shareholders' equity	23,580		22,063
Total liabilities and shareholders' equity	$                         56,888		$                         55,880

 

EXHIBIT F CONSOLIDATED STATEMENT OF CASH FLOWS - (UNAUDITED) DOLLARS IN MILLIONS
	Six Months Ended
	June 29, 2025		June 30, 2024
Cash flows from operating activities—continuing operations:
Net earnings	$                        2,008		$                        1,704
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation of property, plant and equipment	325		311
Amortization of intangible and finance lease right-of-use assets	121		117
Equity-based compensation expense	89		87
Deferred income tax benefit	(98)		(90)
(Increase) decrease in assets, net of effects of business acquisitions:
Accounts receivable	(612)		(158)
Unbilled receivables	(200)		(601)
Inventories	(207)		(1,152)
Increase (decrease) in liabilities, net of effects of business acquisitions:
Accounts payable	(261)		(125)
Customer advances and deposits	106		169
Other, net	179		274
Net cash provided by operating activities	1,450		536
Cash flows from investing activities:
Capital expenditures	(340)		(360)
Other, net	124		53
Net cash used by investing activities	(216)		(307)
Cash flows from financing activities:
Repayment of fixed-rate notes	(1,500)		—
Proceeds from fixed-rate notes	747		—
Proceeds from commercial paper, net	696		—
Dividends paid	(785)		(750)
Purchases of common stock	(600)		(139)
Other, net	39		111
Net cash used by financing activities	(1,403)		(778)
Net cash used by discontinued operations	(5)		(2)
Net decrease in cash and equivalents	(174)		(551)
Cash and equivalents at beginning of period	1,697		1,913
Cash and equivalents at end of period	$                        1,523		$                        1,362

 

EXHIBIT G ADDITIONAL FINANCIAL INFORMATION - (UNAUDITED) DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Other Financial Information:
	June 29, 2025		December 31, 2024
Debt-to-equity (a)	36.9 %		39.7 %
Book value per share (b)	$                  87.66		$                   81.61
Shares outstanding	268,993,342		270,340,502
	Second Quarter				Six Months
	2025		2024		2025		2024
Income tax (payments) refunds, net	$                    (202)		$                        81		$                      (236)		$                          48
Company-sponsored research and development (c)	$                     119		$                      147		$                       220		$                        284
Return on sales (d)	7.8 %		7.6 %		7.9 %		7.5 %
Non-GAAP Financial Measures:
	Second Quarter				Six Months
	2025		2024		2025		2024
Free cash flow:
Net cash provided by operating activities	$                  1,598		$                      814		$                    1,450		$                        536
Capital expenditures	(198)		(201)		(340)		(360)
Free cash flow (e)	$                  1,400		$                      613		$                    1,110		$                        176
	June 29, 2025		December 31, 2024
Net debt:
Total debt	$                  8,712		$                   8,762
Less cash and equivalents	1,523		1,697
Net debt (f)	$                  7,189		$                   7,065

	‌
(a)	Debt-to-equity ratio is calculated as total debt divided by total equity as of the end of the period.
(b)	Book value per share is calculated as total equity divided by total outstanding shares as of the end of the period.
(c)	Includes independent research and development and Aerospace product-development costs.
(d)	Return on sales is calculated as net earnings divided by revenue.
(e)	We define free cash flow as net cash from operating activities less capital expenditures. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our businesses for purposes such as repaying debt, funding business acquisitions, repurchasing our common stock  and paying dividends. We use free cash flow to assess the quality of our earnings and as a key performance measure in evaluating management.
(f)	We define net debt as short- and long-term debt (total debt) less cash and equivalents. We believe net debt is a useful measure for investors because it reflects the borrowings that support our operations and capital deployment strategy. We use net debt as an important indicator of liquidity and financial position.

 

EXHIBIT H BACKLOG - (UNAUDITED) DOLLARS IN MILLIONS
		Funded		Unfunded		Total Backlog		Estimated Potential Contract Value*		Total Estimated Contract Value
Second Quarter 2025:
Aerospace		$             18,676		$               1,227		$             19,903		$                       1,165		$                 21,068
Marine Systems		39,298		13,674		52,972		14,708		67,680
Combat Systems		15,961		616		16,577		9,592		26,169
Technologies		9,945		4,285		14,230		32,011		46,241
Total		$             83,880		$             19,802		$           103,682		$                    57,476		$               161,158
First Quarter 2025:
Aerospace		$             18,171		$                  828		$             18,999		$                       1,090		$                 20,089
Marine Systems		30,882		7,491		38,373		10,261		48,634
Combat Systems		16,129		799		16,928		8,649		25,577
Technologies		9,751		4,606		14,357		32,670		47,027
Total		$             74,933		$             13,724		$             88,657		$                    52,670		$               141,327
Second Quarter 2024:
Aerospace		$             19,126		$                  911		$             20,037		$                          372		$                 20,409
Marine Systems		29,912		11,436		41,348		3,983		45,331
Combat Systems		16,003		673		16,676		5,816		22,492
Technologies		9,365		3,875		13,240		28,283		41,523
Total		$             74,406		$             16,895		$             91,301		$                    38,454		$               129,755

*

The estimated potential contract value includes work awarded on unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options associated with existing firm contracts, including options and other agreements with existing customers to purchase new aircraft and aircraft services. We recognize options in backlog when the customer exercises the option and establishes a firm order. For IDIQ contracts, we evaluate the amount of funding we expect to receive and include this amount in our estimated potential contract value. The actual amount of funding received in the future may be higher or lower than our estimate of potential contract value.

EXHIBIT H-1 BACKLOG - (UNAUDITED) DOLLARS IN MILLIONS

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EXHIBIT H-2 BACKLOG BY SEGMENT - (UNAUDITED) DOLLARS IN MILLIONS

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EXHIBIT I AEROSPACE SUPPLEMENTAL DATA - (UNAUDITED) DOLLARS IN MILLIONS
		Second Quarter				Six Months
		2025		2024		2025		2024
Gulfstream Aircraft Deliveries (units):
Large-cabin aircraft		32		31		62		52
Mid-cabin aircraft		6		6		12		9
Total		38		37		74		61
Aerospace Book-to-Bill:
Orders*		$               4,003		$               2,673		$               6,364		$               5,099
Revenue		3,062		2,940		6,088		5,024
Book-to-Bill Ratio		1.3x		0.9x		1.0x		1.0x

*	Does not include customer defaults, liquidated damages, cancellations, foreign exchange fluctuations and other backlog adjustments.

 

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SOURCE General Dynamics

FAQ

What were General Dynamics (GD) Q2 2025 earnings per share?

General Dynamics reported diluted EPS of $3.74 in Q2 2025, representing a 14.7% increase from the year-ago quarter.

How much revenue did General Dynamics generate in Q2 2025?

General Dynamics generated $13 billion in revenue during Q2 2025, an 8.9% increase compared to the same quarter last year.

What is General Dynamics' current backlog?

General Dynamics reported a backlog of $103.7 billion with a total estimated contract value of $161.2 billion, including potential contract value of $57.5 billion.

How much cash did General Dynamics generate from operations in Q2 2025?

The company generated $1.6 billion in cash from operating activities, representing 158% of net earnings.

What was General Dynamics' book-to-bill ratio in Q2 2025?

General Dynamics achieved a strong book-to-bill ratio of 2.2-to-1, with defense segments at 2.4-to-1 and aerospace at 1.3-to-1.