General Dynamics (GD) delivered a strong start to 2025, with first-quarter results showcasing broad-based revenue and earnings growth, improved profitability, and disciplined capital deployment. Revenue rose 13.9% year-over-year to $12.2 billion, driven by double-digit growth across multiple business segments. Operating earnings increased 22.4% to $1.27 billion, while net earnings climbed 24.4% to $994 million, translating to a 27.1% jump in diluted EPS to $3.66. Enhanced operational efficiency was evident in the 70 basis-point improvement in operating margin to 10.4%, and return on sales reached 8.1%, up from 7.4% a year ago.

The Aerospace segment led the performance, with revenue surging 45.2% on the back of higher Gulfstream deliveries—36 aircraft, up from 24 in Q1 2024—and a favorable mix. Operating earnings in Aerospace soared 69.4%, lifting the segment margin to 14.3%. Although its book-to-bill ratio was 0.8x, backlog remained healthy at $19.0 billion.

Marine Systems posted a 7.7% revenue increase to $3.59 billion and held operating margin steady at 7.0%, while backlog remained robust at $38.4 billion. Combat Systems recorded modest growth, with revenue up 3.5% and operating earnings rising 3.2%, maintaining a strong 13.4% margin, supported by rising demand for weapons systems. Technologies grew 6.8% in revenue, bolstered by higher IT services volume, and improved margins to 9.6%, with operating earnings up 11.2%.

Company-wide orders totaled $10.2 billion, with total backlog ending the quarter at $88.7 billion, slightly down from year-end. Estimated potential contract value stands at $52.7 billion, bringing the total estimated contract value to $141.3 billion.

On the capital side, General Dynamics used $148 million in net cash from operations, a notable improvement from the prior year, driven by working capital fluctuations expected to normalize. Free cash flow was $(290) million, also improving year-over-year. The company returned significant capital to shareholders, with $383 million in dividends—marking the 28th consecutive annual increase—and $600 million in share repurchases. Cash and equivalents totaled $1.2 billion, and total debt stood at $9.6 billion.

The balance sheet remains solid with $56.6 billion in assets, $34.4 billion in liabilities, and $22.2 billion in shareholders’ equity, resulting in a debt-to-equity ratio of 43.2%. Book value per share came in at $82.81.

CEO Phebe Novakovic emphasized the company’s consistent growth and particularly noted the Aerospace segment’s profitability gains as a result of manufacturing efficiencies and higher output. With a strong backlog, rising margins, and a clear commitment to shareholder returns, General Dynamics continues to demonstrate operational momentum and financial strength as it heads into the remainder of 2025.