General Dynamics (GD) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue rose 8.9% year-over-year to $13B, with net earnings up 12% to $1.014B and diluted EPS up 14.7% to $3.74, beating consensus by $0.19.

• First half 2025 revenue reached $25.3B, up 11.3%, with net earnings up 17.9% to $2.008B and EPS up 20.5% to $7.40.

• Backlog reached $103.7B at quarter-end, up 14% year-over-year, with estimated total contract value at $161.2B.

• Record order activity in Q2, with $28.3B in new orders and a consolidated book-to-bill ratio of 2.2x, led by Marine and Aerospace.

• 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 earnings were $1.3B, up 12.9%, with operating margin at 10.0% (up 30 bps year-over-year).

• Free cash flow in Q2 was $1.4B, up from $613M in Q2 2024; first half free cash flow was $1.1B.

• Net cash from operating activities was $1.6B in Q2; cash conversion rate was 138%.

• Capital expenditures were $198M in Q2 and $340M for the first half; expected to be just over 2% of sales for the year.

• Net debt at quarter-end was $7.19B, down $1.2B sequentially.

Outlook and guidance

• 2025 company-wide revenue expected at $51.2B, with a 10.3% operating margin; EPS forecast raised to $15.05–$15.15.

• Aerospace revenue guided to $12.9B (13.5% margin), Marine to $15.6B (7% margin), Combat to $9.2B (14.5% margin), Technologies to $13.5B (9.2% margin).

• Cash conversion rate for the year expected around 90%; higher operating cash flow anticipated in the second half.

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

• Guidance supported by strong backlog and order activity across all segments.