General Dynamics Corporation (NYSE: GD) reported a strong performance for the second quarter of 2025, exceeding earnings expectations with a reported earnings per share (EPS) of $3.74. Analysts had anticipated an EPS of $3.55. The company achieved revenue of $13 billion, marking an increase of 8.9% compared to the same quarter last year.
During the earnings call held on July 23, 2025, Phebe Novakovic, Chairman and Chief Executive Officer, emphasized the company’s robust growth across three of its four business segments. Operating earnings reached $1.3 billion, reflecting a year-over-year increase of 12.9%, while net income surpassed $1 billion, up 12% from the previous year. The positive results contribute to a strong first half of the year, with year-to-date revenue totaling $25.3 billion, up 11.3%.
Strong Order Activity and Backlog Growth
Chief Financial Officer Kim Kuryea highlighted significant order activity during the quarter, which totaled over $28 billion, resulting in a book-to-bill ratio of 2.2:1. The Marine Systems segment was the primary driver of this growth, securing multiple contracts for submarine construction. Kuryea noted that the order intake in Aerospace also performed admirably, achieving a book-to-bill ratio of 1.3. This marked the strongest first half for orders since 2022, driven by strong demand across the Gulfstream product line.
The company concluded the quarter with a record backlog of $103.7 million, representing a 14% increase year-over-year. Total estimated contract value, including options and indefinite delivery/indefinite quantity contracts, reached over $160 billion—another all-time high for General Dynamics.
Kuryea also shared details regarding cash flow performance, reporting $1.6 billion in operating cash flow for the quarter. After accounting for capital expenditures, free cash flow stood at $1.4 billion, yielding a remarkable cash conversion rate of 138%. Furthermore, the company anticipates a strong second half of 2025, expecting to achieve a cash conversion rate of around 90% by year-end.
Segment Performance Highlights
In terms of individual business segments, the Aerospace division reported revenue of $3.06 billion, up 4.1% from the prior year. Operating earnings for Aerospace were $403 million, demonstrating a significant increase of 26.3%. The segment benefited from 38 deliveries of Gulfstream aircraft, including 15 G700s—surpassing both the previous year and sequential deliveries.
The Marine Systems segment also showcased impressive growth, generating revenue of $4.22 billion, a substantial 22.2% increase year-over-year. This growth was primarily driven by the construction of Columbia-class and Virginia-class submarines. Operating earnings for the Marine segment reached $291 million, reflecting an increase of 18.8% quarter-over-quarter.
Combat Systems exhibited stable performance, with revenue of $2.28 billion, nearly flat compared to the previous year. However, operating earnings in this segment increased by 3.5%, reaching $324 million. Technologies segment revenue also grew by 5.5%, amounting to $3.5 billion.
The management team expressed optimism about the company’s trajectory moving forward. General Dynamics is poised for continued growth, driven by strong demand across its diverse portfolio. As the company navigates a dynamic market, its strategic focus on operational efficiency and cash generation remains paramount.
In summary, General Dynamics has recorded a successful second quarter in 2025, marked by robust earnings, significant order activity, and a record backlog. The company is well-positioned to capitalize on emerging opportunities as it moves into the latter half of the year.
