General Dynamics (NYSE: GD) reports a particularly strong second quarter for 2025, with significant growth in revenue and profitability. The company, a key player in the global aerospace and defense industries, demonstrated consistent growth across all four of its segments, alongside strong cash flow and exceptional order activity. These results position General Dynamics strongly for the second half of the year, indicating its resilience even in a changing economic and geopolitical environment.

Impressive Financial Performance and Broad-Based Growth Across All Segments

General Dynamics recorded revenues of $13 billion in the second quarter of 2025, an increase of 8.9% compared to the prior-year quarter. The company’s operating earnings increased by 12.9%, and diluted Earnings Per Share (EPS) surged 14.7% and reached $3.74. The operating margin expanded by 30 basis points to 10.0%, indicating improved operational efficiency. Phebe Novakovic, chairman and chief executive officer, emphasized that “During the first half of the year, each of our four segments achieved growth in revenue and earnings, with margins on a companywide basis expanding 50 basis points over the same period last year”.

The company also demonstrated exceptional cash flow performance: Net cash provided by operating activities in the quarter totaled $1.6 billion, representing 158% of net earnings. During the quarter, General Dynamics paid $402 million in dividends, invested $198 million in capital expenditures, and reduced total debt by $897 million. The company ended the quarter with $8.7 billion in total debt and $1.5 billion in cash and equivalents on hand. These figures reflect prudent financial management and strong cash generation capabilities.

Unprecedented Backlog Ensures Future Stability

General Dynamics’ order activity was particularly strong, with a consolidated book-to-bill ratio of 2.2-to-1 for the quarter. For the defense segments (Combat Systems and Technologies), the ratio stood at 2.4-to-1, and for the aerospace segment (Aerospace) at 1.3-to-1. Overall, company-wide orders totaled $28.3 billion.

The backlog at the end of the quarter reached a record $103.7 billion. Additionally, the estimated potential contract value, including unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, amounted to $57.5 billion. The total estimated contract value, the sum of all backlog components, was $161.2 billion. This backlog constitutes a solid foundation for future revenues and provides high visibility into the company’s performance in the coming years.

Detailed Segment Performance: Diverse Growth Engines

General Dynamics comprises four main segments, all of which contributed to the positive results of the quarter.

Aerospace segment recorded revenues of $3.06 billion, a 4.1% year-over-year increase. The segment’s operating earnings amounted to $403 million, a surge of 26.3%. The Gulfstream division, under this segment, delivered 38 aircraft (32 large-cabin and 6 mid-cabin) in the second quarter of 2025, a slight increase from 37 aircraft in the prior-year quarter. The Aerospace segment’s book-to-bill ratio was 1.3x.

Marine Systems segment showed particularly impressive growth, with revenues of $4.22 billion, a 22.2% year-over-year increase. The segment’s operating earnings stood at $291 million, an 18.8% increase. This segment is involved in ship construction and repair, and its growth indicates stable demand in the naval defense sector.

Combat Systems segment recorded revenues of $2.28 billion, a slight decrease of only 0.2% , but improved its operating earnings by 3.5% to $324 million. This segment produces land combat vehicles, weapon systems, and munitions, and its operating margin was 14.2%, demonstrating its high profitability.

Technologies segment reported revenues of $3.48 billion, a 5.5% year-over-year increase , and operating earnings of $332 million, a 3.8% increase. This segment provides a wide range of technology products and services.

Conclusion and Forward Outlook

General Dynamics’ second-quarter 2025 report paints a particularly positive picture of a company with strong financial and operational performance. The significant increase in revenue and earnings, coupled with an exceptional ability to generate robust cash flow, illustrate the company’s resilience and the effectiveness of its business model. The unprecedented backlog, exceeding $100 billion, provides a stable foundation for future growth and mitigates exposure to market volatility.

The strong performance in the Aerospace and Marine Systems segments, alongside stability in Combat Systems and Technologies, indicates a diversified portfolio of products and services relevant to the current needs of global defense and aviation markets. General Dynamics, employing over 110,000 people worldwide and with revenues of $47.7 billion in 2024, continues to be a key player capable of navigating market challenges and generating significant profits. Management remains optimistic about the second half, based on the company’s strong positioning and the sustained demand for its products and servi