General Dynamics (GD) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $13B, up 8.9% year-over-year, with net earnings of $1.014B, operating earnings of $1.3B, and diluted EPS of $3.74, a 14.7% increase, driven by strong Aerospace and Marine Systems performance.

• Year-to-date revenue was $25.3B, up 11.3%, with net earnings of $2.008B, operating earnings of $2.6B, and EPS of $7.40, up 20.5%.

• Backlog reached $103.7B at quarter-end, up 14% year-over-year, with estimated total contract value at $161.2B, and orders in Q2 exceeded $28B, driving a book-to-bill ratio of 2.2x.

• Free cash flow for Q2 was $1.4B and $1.1B for the first half, with strong cash generation and a Q2 cash conversion rate of 138%.

• All four business segments posted revenue and earnings growth in the first half, with companywide margin expansion of 50 basis points year-over-year.

Financial highlights

• Q2 operating margin improved to 10.0% from 9.7% year-over-year; six-month margin rose to 10.2%.

• Net earnings for Q2 were $1.014B, up 12% from Q2 2024; diluted EPS for six months was $7.40, up 20.5%.

• Product revenue up 11.9% in Q2, led by ship construction and G700 deliveries; service revenue up 4.4% on higher IT services volume.

• Effective tax rate for Q2 was 17.7%; first half at 17.4%.

• Net debt position at $7.2B, down $1.2B sequentially; debt-to-equity ratio improved to 36.9%.

Outlook and guidance

• 2025 revenue guidance raised to $51.2B, up $900M; operating margin held at 10.3%.

• EPS forecast increased to $15.05–$15.15.

• Aerospace revenue expected at $12.9B with 13.5% margin; Marine at $15.6B (7% margin); Combat at $9.2B (14.5% margin); Technologies at $13.5B (9.2% margin).

• Corporate operating costs expected at ~$160M for 2025.

• Anticipates higher operating cash flow in the second half as working capital timing reverses.