Executive Summary
General Dynamics delivered solid Q2 2025 results, driven by sustained demand across its diversified segments and robust cash generation. Revenue reached $13.041 billion, up 11.7% year-over-year and 6.7% quarter-over-quarter, supported by a favorable mix of programs and ongoing Navy and defense modernization initiatives. Gross profit of $1.949 billion yielded a gross margin of 14.9%, while operating income of $1.305 billion produced an operating margin near 10.0%. Net income was $1.014 billion with earnings per share (GAAP) of $3.78 and diluted EPS of $3.74, reflecting a year-over-year EPS increase of ~11.5%. Free cash flow stood at $1.40 billion, with cash flow from operations of $1.60 billion and capital expenditures of $198 million, underscoring the company’s disciplined capital allocation.
Key Performance Indicators
Key Insights
Revenue: $13.041B (+11.74% YoY; +6.69% QoQ). Gross Profit: $1.949B; Gross Margin: 14.95% (+7.32% YoY; +2.96% QoQ). Operating Income: $1.305B; Operating Margin: 10.00% (+10.50% YoY; +2.92% QoQ). Net Income: $1.014B; Net Margin: 7.78% (+9.03% YoY; +2.01% QoQ). EPS (GAAP): $3.78; EPS (Diluted): $3.74; YoY EPS: +11.50%; QoQ EPS: +2.44%. Free Cash Flow: $1.40B; CFO: $1.60B; Capex: $198M; Dividends Paid: $402M; Payout Ratio: 39.6%....
Financial Highlights
Revenue: $13.041B (+11.74% YoY; +6.69% QoQ). Gross Profit: $1.949B; Gross Margin: 14.95% (+7.32% YoY; +2.96% QoQ). Operating Income: $1.305B; Operating Margin: 10.00% (+10.50% YoY; +2.92% QoQ). Net Income: $1.014B; Net Margin: 7.78% (+9.03% YoY; +2.01% QoQ). EPS (GAAP): $3.78; EPS (Diluted): $3.74; YoY EPS: +11.50%; QoQ EPS: +2.44%. Free Cash Flow: $1.40B; CFO: $1.60B; Capex: $198M; Dividends Paid: $402M; Payout Ratio: 39.6%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
13.04B |
11.74% |
6.69% |
| Gross Profit |
1.95B |
7.32% |
2.96% |
| Operating Income |
1.31B |
10.50% |
2.92% |
| Net Income |
1.01B |
9.03% |
2.01% |
| EPS |
3.78 |
11.50% |
2.44% |
Key Financial Ratios
operatingProfitMargin
10%
operatingCashFlowPerShare
$5.96
freeCashFlowPerShare
$5.22
dividendPayoutRatio
39.6%
Management Commentary
Transcript data not provided for QQ2 2025. No verbatim management quotes are available in the provided dataset. Implication: absent direct quotes, the analysis relies on reported results and historical commentary patterns to infer management priorities (e.g., program execution, mix shift, cost discipline, and balance sheet strength).
Forward Guidance
There is no formal forward guidance in the supplied transcript data. Qualitatively, GD appears well-positioned for continued cash flow generation given a strong backlog in defense programs and ongoing Navy modernization cycles. Potential catalysts include higher-margin technology offerings (AI, cloud-enabled mission systems) and disciplined capital allocation (dividends, potential selective investments). Key uncertainties to monitor include government budget cycles, potential cost inflation, and program mix effects on margins. Investors should track any updated guidance on revenue mix by segment, backlog evolution, and target capital deployment.