General Dynamics (GD) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $14.1B, up 8.1% year-over-year, with operating earnings of $1.5B and net earnings of $1.16B; diluted EPS was $4.24, up 13.4% year-over-year.

• All four segments posted revenue growth, with Aerospace and Marine Systems achieving double-digit increases and notable margin expansion.

• Backlog reached a record $136.5B, up 31.7% year-over-year, with a company-wide book-to-bill ratio of 1.4x and strong order activity.

• Major contract wins and program milestones, including the 100th G700 aircraft and significant awards in Combat and Marine Systems.

• Management highlighted robust demand and ongoing investments to increase output and meet customer needs.

Financial highlights

• Operating margin improved to 10.4% in Q2 2026, up 40 basis points year-over-year.

• Net earnings for Q2 2026 were $1.16B, up 14.4% year-over-year; diluted EPS was $4.24, up from $3.74.

• Free cash flow for Q2 was $1.65B, with operating cash flow at $1.9B; free cash flow for the first half was $3.6B.

• Ended the quarter with $4.3B in cash and net debt of $3.18B, down from $5.68B at year-end 2025.

• Capital expenditures were $234M in Q2 and $437M for the first half, up nearly 30% year-over-year.

Outlook and guidance

• Full-year 2026 EPS guidance raised to $16.80–$16.90; company-wide revenue expected at $55.7B with a 10.5% operating margin.

• Segment revenue guidance: Aerospace ~$13.8B (14.7% margin), Marine ~$18B (7.4%), Combat ~$9.8B (13.8%), Technologies ~$14.1B (9.4%).

• Free cash flow conversion expected at ~105% of net income for the year.

• Full-year effective tax rate expected at ~17.5%.

• Management expects robust demand and strong order activity across all business units, with book-to-bill ratios above 1.0x in all segments.