General Dynamics (GD) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $12.91B, up 10.6% year-over-year, with diluted EPS of $3.88, up 15.8%, and net earnings of $1.06B, up 13.9%.

• Year-to-date revenue reached $38.2B, up 11%, with net earnings of $3.07B, up 16.4%, and EPS of $11.29, up 19%.

• Record backlog of $109.9B at quarter-end, up 19% year-over-year, with strong order momentum and book-to-bill ratios above 1.2 in all segments.

• All four business segments grew earnings and backlog, led by Aerospace's 30% revenue growth and strong performance in Marine Systems.

• Productivity gains and favorable mix drove operating margin improvement to 10.3% in Q3.

Financial highlights

• Free cash flow for Q3 was $1.9B, 179% of net income, and $3.0B year-to-date, nearly doubling year-over-year.

• Book-to-bill ratio for the quarter was 1.5 overall, 1.6 for defense, and 1.3 for Aerospace.

• Operating margin improved by 30 bps sequentially and 20 bps year-over-year to 10.3%.

• Return on sales improved to 8.2% for the quarter.

• G&A expenses decreased to 5% of revenue for the nine months.

Outlook and guidance

• Annual revenue expected around $52B with margins near 10.3%; segment guidance: Aerospace ~$13.2B (13.3% margin), Marine ~$16B (7% margin), Combat ~$9.2B (14.3% margin), Technologies ~$13.5B (9.4% margin).

• EPS forecast raised to $15.30–$15.35; full-year effective tax rate anticipated at ~17.5%.

• Free cash flow conversion for the year anticipated in the low 90% range.

• Management remains cautious due to the ongoing government shutdown and federal spending uncertainties.

• Corporate operating costs expected to be ~$160 million for 2025.