General Dynamics (GD) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $12.2B, up 13.9% year-over-year, with net earnings of $994M and EPS of $3.66, a 27.1% increase.

• All four business segments posted revenue and operating earnings growth, led by Aerospace with a 45.2% revenue increase and 69.4% rise in operating earnings.

• Operating margin improved to 10.4%, a 70 bps increase, driven by Aerospace and Technologies.

• Backlog at quarter-end was $88.7B, with total estimated contract value of $141.3B, supporting future revenue visibility.

• Consensus EPS was beaten by $0.16.

Financial highlights

• Operating earnings reached $1.27B, up 22.4% year-over-year; net earnings up 24.4% to $994M.

• Free cash flow was negative $290M, better than expected, with cash and equivalents at $1.2B.

• Capital expenditures were $142M (1.2% of sales), expected to rise to 2% of revenue for the year.

• Returned over $980M to shareholders via $383M in dividends and $600M in share repurchases.

• Net debt principal increased to $9.68B, with $1.6B in commercial paper outstanding.

Outlook and guidance

• Revenue growth expected to continue, but at a slower rate as G700 and G800 deliveries begin in Q2 2025.

• Modestly positive cash flow expected in Q2, with substantial improvement in Q3 and Q4.

• No update to full-year guidance; management expects continued steady growth and improved operating performance.

• No material impact anticipated from recent federal government actions, tariffs, or environmental matters.

• Forward-looking statements caution that actual results may differ due to risks and uncertainties.