General Dynamics Corporation (NYSE: GD) reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations with earnings per share (EPS) of $3.74, compared to the anticipated $3.55. The company generated revenue of $13 billion, marking an increase of 8.9% compared to the same quarter last year. This positive performance was announced during the earnings conference call held on July 23, 2025.
The call, led by Phebe Novakovic, Chairman and Chief Executive Officer, and Kim Kuryea, Chief Financial Officer, highlighted significant growth across three of the company’s four business segments. Operating earnings increased by 13% to $1.3 billion, while net income rose to over $1 billion, resulting in a 12% increase year-over-year.
According to Novakovic, the quarter’s results exceeded expectations and contributed to a strong first half of the year. Revenue for the year-to-date reached $25.3 billion, an increase of 11.3%, with operating earnings of nearly $2.6 billion, up 17.4%.
Strong Orders and Backlog Growth
During the call, Kim Kuryea detailed the robust order activity, with the company securing over $28 billion in new contracts, yielding a book-to-bill ratio of 2.2:1. The Marine Systems segment was the largest contributor, benefiting from contracts for submarine construction. Aerospace also performed well, achieving a book-to-bill ratio of 1.3, reflecting strong demand for the Gulfstream product line.
The backlog at General Dynamics reached a record level of $103.7 million, representing a 14% increase year-over-year. The total estimated contract value, including options and Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, surpassed $160 billion, another all-time high.
In terms of cash generation, the company reported $1.6 billion in operating cash flow for the quarter. After accounting for capital expenditures, free cash flow was $1.4 billion, achieving a cash conversion rate of 138%. For the first half of 2025, free cash flow totaled $1.1 billion, significantly exceeding expectations.
Segment Performance Highlights
In the Aerospace sector, revenue rose to $3.06 billion, a 4.1% increase year-over-year, with operating earnings of $403 million. Notably, Gulfstream delivered 38 aircraft during the quarter, including 15 G700s. This performance was partially offset by fewer deliveries of the G650 as the last units of this high-margin product were shipped.
The Marine segment reported revenue of $4.22 billion, reflecting a remarkable 22.2% increase compared to the previous year. The growth stemmed from continued construction of Columbia-class and Virginia-class submarines, alongside an uptick in DDG-51 construction.
Combat Systems reported revenue of $2.28 billion, with operating earnings rising by 3.5% to $324 million. The segment maintained a stable book-to-bill ratio of 1:1 during the quarter.
Finally, the Technologies segment saw revenue growth of 5.5% to $3.5 billion, with operating earnings increasing by 3.8%. Despite a slight decline in operating margin due to a shift in business mix, the backlog for this segment increased by 7.5% from the previous year.
In summary, General Dynamics Corporation’s Q2 results reflect a solid operational performance across its business segments, with strong demand, increased revenue, and robust order activity setting a positive outlook for the remainder of 2025. As the company prepares for the second half of the year, it aims to maintain its momentum and capitalize on growing market opportunities.