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GENERAL DYNAMICS CORP

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Business Summary

General Dynamics is a global aerospace and defense company that specializes in high-end design, engineering and manufacturing to deliver state-of-the-art solutions to customers, offering a broad portfolio of products and services in business aviation; ship construction and repair; land combat vehicles, weapon systems and munitions; and technology products and services. The company consists of 10 business units organized into four operating segments: Aerospace, Marine Systems, Combat Systems and Technologies, with the latter three collectively referred to as the defense segments. The company's leadership positions in attractive business aviation and defense markets enable it to deliver superior and enduring capabilities to customers and returns to shareholders.

The Aerospace segment is recognized as a leading producer of business jets and the standard bearer in new technology aircraft, aircraft repair, customer support and custom completion services, with Gulfstream's in-service aircraft holding more than 350 city-pair speed records, more than any other business jet manufacturer. The Marine Systems segment is the leading designer and builder of nuclear-powered submarines and a leader in surface combatant and auxiliary ship design and construction for the U.S. Navy. The Combat Systems segment is a premier manufacturer and integrator of land combat solutions worldwide, including wheeled and tracked combat vehicles, weapon systems, energetics and munitions, and holds a global leadership position in large-caliber tank ammunition, medium-caliber ammunition, and high-speed Gatling guns. The Technologies segment provides a full spectrum of services, technologies and products to a wide range of military, intelligence, federal civilian and state customers, with a highly skilled workforce comprising approximately 40,000 employees .

The company generates revenue through the design, manufacture, and sale of business jet aircraft and related services in the Aerospace segment; the design, construction, and lifecycle support of nuclear-powered submarines and surface ships for the U.S. Navy in Marine Systems; the production and integration of land combat vehicles, weapon systems, and munitions in Combat Systems; and the provision of technology solutions, mission-support services, and C5ISR systems in the Technologies segment. Revenue is derived from fixed-price, cost-reimbursement, and time-and-materials contracts, with the U.S. government as the primary customer, accounting for 68% of consolidated revenue in 2025. The company's business units are responsible for strategy and operating results, with a lean corporate function setting overall strategy and allocating capital.

The Aerospace segment's revenue is generated from aircraft manufacturing and aircraft services. In 2025, aircraft manufacturing revenue was $9,413 and aircraft services revenue was $3,697 , for total Aerospace revenue of $13,110 . The segment's product line includes the G800, which entered service in 2025 following FAA certification in April 2025, offering an 8,200-nautical-mile range at Mach 0.85 ; the G700, which entered service in 2024; the G500 and G600, which entered service in 2018 and 2019 respectively; the G400, currently in development; and the newly announced G300, a super midsize aircraft. Gulfstream designs, develops and manufactures aircraft in Savannah, Georgia, including all large-cabin models, while midsize aircraft are assembled by a non-U.S. partner. Jet Aviation manages over 300 business aircraft globally and operates a leading global FBO network of approximately 30 facilities on four continents.

The Marine Systems segment's revenue is derived from nuclear-powered submarines, surface ships, and repair and other services. In 2025, nuclear-powered submarine revenue was $12,608 , surface ship revenue was $2,932 , and repair and other services revenue was $1,183 , for total Marine Systems revenue of $16,723 . The segment consists of Electric Boat, Bath Iron Works, and NASSCO. Electric Boat is the prime contractor on all Navy nuclear-powered submarine programs, including the Columbia-class ballistic-missile submarine program, a 12-boat program with a value in excess of $125 billion , and the Virginia-class attack submarine program, with 14 Virginia-class submarines in backlog scheduled for delivery through 2034 . Bath Iron Works builds the Arleigh Burke-class (DDG-51) guided-missile destroyer and in 2025 was competitively awarded construction of an additional DDG-51 destroyer (DDG-148), bringing total backlog to 11 ships with scheduled deliveries through 2032 . NASSCO is building the Expeditionary Sea Base and the John Lewis-class (T-AO-205) fleet replenishment oiler, with seven T-AO-205 ships currently in backlog with deliveries planned into 2030 .

The Combat Systems segment's revenue is derived from military vehicles, weapon systems and munitions, and engineering and other services. In 2025, military vehicle revenue was $4,970 , weapon systems and munitions revenue was $3,104 , and engineering and other services revenue was $1,172 , for total Combat Systems revenue of $9,246 . The segment consists of Land Systems, European Land Systems, and Ordnance and Tactical Systems. Land Systems is the sole-source producer of the Abrams main battle tank and Stryker wheeled combat vehicle, and is developing the next generation M1E3 Abrams tank and the XM30 mechanized infantry combat vehicle, with eight initial prototypes being delivered in 2026 . European Land Systems produces and upgrades Piranha vehicles worldwide and offers the ASCOD tracked combat vehicle. Ordnance and Tactical Systems is a leading provider of munitions, weapon systems, artillery, and energetics, with over 25 locations across the United States and Canada. The Technologies segment's revenue is derived from IT services and C5ISR solutions. In 2025, IT services revenue was $9,057 and C5ISR solutions revenue was $4,414 , for total Technologies revenue of $13,471 . The segment consists of GDIT and Mission Systems, with GDIT providing technology solutions and expertise including cloud services, cybersecurity, and AI/ML, and Mission Systems providing defense electronics and C5ISR applications.

In 2025, Jet Aviation acquired an FBO at Paris - Le Bourget Airport, expanding its global FBO network. Gulfstream launched initial operations at a new FBO at Miami Opa Locka Executive Airport in Florida, expected to be fully operational in mid-2026 . In the second half of 2025, the company announced the all new, super midsize G300 aircraft. In the Marine Systems segment, NASSCO received an award for the eleventh and twelfth T-AO-205 ships in 2025. In the Combat Systems segment, the company received $9.2 billion of combined awards for wheeled and tracked vehicles for international customers. In the Technologies segment, Mission Systems was selected by the U.S. Space Development Agency to establish the ground operations and integration segment for Tranches 1 and 2 of the National Defense Space Architecture. On the capital front, in March 2025, the company repaid fixed-rate notes of $750 with cash on hand and commercial paper issuances, and in May 2025, issued $750 of fixed-rate notes to repay maturing notes. The company repurchased 2.5 million shares for $637 in 2025.

Consolidated revenue for 2025 was $52,550 , an increase of 10.1% from $47,716 in 2024. Operating earnings were $5,356 in 2025, an increase of 11.7% from $4,796 in 2024. Diluted earnings per share were $15.45 in 2025, up 13.4% from $13.63 in 2024. Net earnings were $4,210 in 2025 compared to $3,782 in 2024. Cash provided by operating activities was $5,120 in 2025, or 122% of net earnings. Total backlog was $118,046 at the end of 2025, an increase of 30% from $90,597 at the end of 2024.

Business Outlook

The company provided specific guidance for the 2026 fiscal year. The Aerospace segment's 2026 revenue is expected to increase to approximately $13.6 billion with operating margin of approximately 14% . The Marine Systems segment's 2026 revenue is expected to increase to $17.3-$17.7 billion with operating margin of around 7.3% . The Combat Systems segment's 2026 revenue is expected to increase to approximately $9.6-$9.7 billion with operating margin of approximately 14.1% . The Technologies segment's 2026 revenue is expected to increase to approximately $13.8 billion with operating margin of approximately 9.2% . Corporate operating costs are expected to be approximately $160 in 2026.

In the Aerospace segment, the company expects the growing installed base of aircraft will continue to lead to increased demand for global aircraft services. The G800 entered service in 2025, and the company expects the investments in a new family of Gulfstream aircraft to continue to fuel demand. The G400 is currently in development and will join a market segment in which Gulfstream has not participated for several decades, completing a nearly two-decade effort to develop an all-new family of Gulfstream aircraft. The newly announced G300 will replace the G280 and feature an all-new Harmony Flight Deck. In the defense segments, the company expects significant demand in U.S. Navy shipbuilding, particularly submarines, over the next two decades, and has invested in facilities and workforce to increase production capacity. Internationally, as a result of ongoing regional conflicts and the overall threat environment, the company has seen increased demand, particularly in Europe, for Combat Systems military products and services.

The Aerospace segment's operating margin increased 30 basis points in 2025 to 13.3% , and the company expects 2026 operating margin of approximately 14% . The Marine Systems segment's operating margin increased 50 basis points in 2025 to 7.0% , and the company expects 2026 operating margin of around 7.3% . The Combat Systems segment's operating margin increased 20 basis points in 2025 to 14.4% , and the company expects 2026 operating margin of approximately 14.1% . The Technologies segment's operating margin decreased 10 basis points in 2025 to 9.5% , and the company expects 2026 operating margin of approximately 9.2% . G&A expenses as a percentage of revenue decreased to 4.9% in 2025 from 5.4% in 2024, and the company expects G&A expenses as a percentage of revenue in 2026 to be generally consistent with 2025 .

The company has invested in facilities and workforce to increase production capacity to meet demand in U.S. Navy shipbuilding, particularly submarines, and expects to continue to do so. The company has been working with the Navy customer to stabilize and grow the supply chain to meet heightened demand. In the Combat Systems segment, the company is investing in the development of the next generation of combat vehicles and artillery. Ordnance and Tactical Systems across multiple locations is expanding production capacity and capabilities, including artillery-projectile and propelling-charge load, assemble and pack lines; extruded propellant production; increased Ball Powder propellant capacity; and continued advancement in solid rocket motor production. The company expects the Electric Boat workforce to continue to grow to enable sustained production of one Columbia-class submarine plus up to two Virginia-class submarines per year. The company continues to develop and work with a growing network of approximately 3,000 suppliers to support the growth related to concurrent production of the two submarine programs.

Company-sponsored research and development expenses, including Aerospace product-development costs, were $486 in 2025, compared to $565 in 2024. Capital expenditures were $1,161 in 2025, up almost 30% from $916 in 2024. The company paid cash dividends of $1,593 in 2025, and on March 5, 2025, the board declared an increased quarterly dividend of $1.50 per share, the 28th consecutive annual increase. The company repurchased 2.5 million shares for $637 in 2025. On December 31, 2025, 6.8 million shares remained authorized by the Board for repurchase, representing 2.5% of total shares outstanding. The company expects 2026 net interest expense to be approximately $340 , which assumes that the company refinances the notes maturing in 2026 at higher interest rates. For 2026, the company expects a full-year effective tax rate of approximately 17.5% .

The company's Aerospace business has been impacted by inflationary pressures and the administration's implementation of tariffs, which reduced the Aerospace operating margins by 30 basis points in 2025, though the duration and extent of the tariffs continue to evolve. The ongoing sanctions on Russia have restricted access to a segment of the market. The company's ability to produce new aircraft is dependent on its supply chain, and while performance has improved and the overall supply chain has stabilized, the company has experienced some challenges in terms of delay including at its Israel-based supplier of mid-cabin airframes caused by the conflict with Hamas. In the federal market, the administration began taking steps in 2025 to address federal spending and reduce the size of the government, resulting in federal government staff reductions, contract modifications and terminations, and award delays, which were largely limited to the IT services business. The company expects some limited ongoing impact from these actions and entered 2026 with the government operating under a continuing resolution that expires on January 30, with the outlook for the year assuming the FY26 budget is approved without significant delay or another prolonged shutdown.

Risk Factors

The U.S. government provides a significant portion of the company's revenue, with approximately 70% of consolidated revenue from the U.S. government, and decreases in U.S. government defense spending or changes in spending allocation could result in programs being reduced, delayed, or terminated. U.S. government contracts are subject to termination for convenience, and if a contract is terminated for convenience, the contractor usually receives payments for allowable costs incurred and a proportionate share of fees, but termination of multiple or large programs could have a material adverse effect on future revenue and earnings. The company's Aerospace segment is subject to changing customer demand for business jets, which can be affected by changes in general economic conditions, the availability and cost of credit, and pricing pressures. The company's success depends on its ability to develop new products and technologies and maintain a qualified workforce, and if the company is unable to develop new products that meet customers' changing needs or successfully attract and retain qualified personnel, future revenue and earnings may be materially adversely affected. The company's business could be negatively impacted by cybersecurity events and other disruptions, and while prior events have not had a material impact, future threats could have a materially adverse impact on the company's business, financial condition, results of operations, or reputation.

Management Priorities

Management's message emphasizes strong operating performance in 2025, with revenue of $52.6 billion , an increase of 10.1% from 2024, operating earnings of $5.4 billion , an increase of 11.7% from 2024 with sequential growth throughout the year, diluted earnings per share of $15.45 , up 13.4% from 2024, and cash provided by operating activities of $5.1 billion , or 122% of net earnings. Management highlights that backlog of $118 billion , an increase of 30% from 2024, supports long-term growth expectations, driven by strong Gulfstream aircraft order activity and several significant contract awards in the defense segments, including $20.1 billion of combined awards from the U.S. Navy for the Virginia-class and Columbia-class submarine programs and $9.2 billion of combined awards for wheeled and tracked vehicles for international customers. The strategic priorities emphasized for the period ahead include investing in advanced technologies, focusing on execution, pursuing a culture of continuous improvement, and striving to be the low-cost, high-quality provider in each market to deliver long-term value creation measured by strong earnings and cash flow and an attractive return on capital.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Technologies
  2. [2] Item 1, Business — Customers
  3. [3] Item 1, Business — Aerospace
  4. [4] Item 1, Business — Aerospace
  5. [5] Item 1, Business — Aerospace
  6. [6] Item 1, Business — Aerospace
  7. [7] Item 1, Business — Aerospace
  8. [8] Item 1, Business — Aerospace
  9. [9] Item 1, Business — Marine Systems
  10. [10] Item 1, Business — Marine Systems
  11. [11] Item 1, Business — Marine Systems
  12. [12] Item 1, Business — Marine Systems
  13. [13] Item 1, Business — Marine Systems
  14. [14] Item 1, Business — Marine Systems
  15. [15] Item 1, Business — Marine Systems
  16. [16] Item 1, Business — Marine Systems
  17. [17] Item 1, Business — Combat Systems
  18. [18] Item 1, Business — Combat Systems
  19. [19] Item 1, Business — Combat Systems
  20. [20] Item 1, Business — Combat Systems
  21. [21] Item 1, Business — Combat Systems
  22. [22] Item 1, Business — Combat Systems
  23. [23] Item 1, Business — Technologies
  24. [24] Item 1, Business — Technologies
  25. [25] Item 1, Business — Technologies
  26. [26] Item 1, Business — Aerospace
  27. [27] Item 7, MD&A — Business Environment
  28. [28] Item 7, MD&A — Liquidity and Capital Resources
  29. [29] Item 7, MD&A — Liquidity and Capital Resources
  30. [30] Item 8, Note N — Shareholders' Equity
  31. [31] Item 8, Note N — Shareholders' Equity
  32. [32] Item 7, MD&A — Consolidated Overview
  33. [33] Item 7, MD&A — Consolidated Overview
  34. [34] Item 7, MD&A — Consolidated Overview
  35. [35] Item 7, MD&A — Consolidated Overview
  36. [36] Item 7, MD&A — Consolidated Overview
  37. [37] Item 7, MD&A — Consolidated Overview
  38. [38] Item 7, MD&A — Consolidated Overview
  39. [39] Item 7, MD&A — Consolidated Overview
  40. [40] Item 8, Consolidated Statement of Earnings
  41. [41] Item 8, Consolidated Statement of Earnings
  42. [42] Item 8, Consolidated Statement of Earnings
  43. [43] Item 7, MD&A — Liquidity and Capital Resources
  44. [44] Item 7, MD&A — Consolidated Overview
  45. [45] Item 7, MD&A — Backlog and Estimated Potential Contract Value
  46. [46] Item 7, MD&A — Consolidated Overview
  47. [47] Item 7, MD&A — Backlog and Estimated Potential Contract Value
  48. [48] Item 7, MD&A — Review of Operating Segments — Aerospace
  49. [49] Item 7, MD&A — Review of Operating Segments — Aerospace
  50. [50] Item 7, MD&A — Review of Operating Segments — Marine Systems
  51. [51] Item 7, MD&A — Review of Operating Segments — Marine Systems
  52. [52] Item 7, MD&A — Review of Operating Segments — Combat Systems
  53. [53] Item 7, MD&A — Review of Operating Segments — Combat Systems
  54. [54] Item 7, MD&A — Review of Operating Segments — Technologies
  55. [55] Item 7, MD&A — Review of Operating Segments — Technologies
  56. [56] Item 7, MD&A — Review of Operating Segments — Corporate
  57. [57] Item 7, MD&A — Review of Operating Segments — Aerospace
  58. [58] Item 7, MD&A — Review of Operating Segments — Aerospace
  59. [59] Item 7, MD&A — Review of Operating Segments — Aerospace
  60. [60] Item 7, MD&A — Review of Operating Segments — Marine Systems
  61. [61] Item 7, MD&A — Review of Operating Segments — Marine Systems
  62. [62] Item 7, MD&A — Review of Operating Segments — Marine Systems
  63. [63] Item 7, MD&A — Review of Operating Segments — Combat Systems
  64. [64] Item 7, MD&A — Review of Operating Segments — Combat Systems
  65. [65] Item 7, MD&A — Review of Operating Segments — Combat Systems
  66. [66] Item 7, MD&A — Review of Operating Segments — Technologies
  67. [67] Item 7, MD&A — Review of Operating Segments — Technologies
  68. [68] Item 7, MD&A — Review of Operating Segments — Technologies
  69. [69] Item 7, MD&A — Other Information — G&A Expenses
  70. [70] Item 7, MD&A — Other Information — G&A Expenses
  71. [71] Item 7, MD&A — Other Information — G&A Expenses
  72. [72] Item 1, Business — Marine Systems
  73. [73] Item 8, Note A — Summary of Significant Accounting Policies
  74. [74] Item 8, Note A — Summary of Significant Accounting Policies
  75. [75] Item 7, MD&A — Liquidity and Capital Resources
  76. [76] Item 7, MD&A — Liquidity and Capital Resources
  77. [77] Item 7, MD&A — Liquidity and Capital Resources
  78. [78] Item 8, Consolidated Statement of Cash Flows
  79. [79] Item 7, MD&A — Liquidity and Capital Resources
  80. [80] Item 8, Note N — Shareholders' Equity
  81. [81] Item 8, Note N — Shareholders' Equity
  82. [82] Item 7, MD&A — Liquidity and Capital Resources
  83. [83] Item 7, MD&A — Liquidity and Capital Resources
  84. [84] Item 7, MD&A — Other Information — Interest, Net
  85. [85] Item 7, MD&A — Other Information — Provision for Income Tax, Net
  86. [86] Item 7, MD&A — Business Environment
  87. [87] Item 1A, Risk Factors
  88. [88] Item 7, MD&A — Consolidated Overview
  89. [89] Item 7, MD&A — Consolidated Overview
  90. [90] Item 7, MD&A — Consolidated Overview
  91. [91] Item 7, MD&A — Consolidated Overview
  92. [92] Item 7, MD&A — Consolidated Overview
  93. [93] Item 7, MD&A — Consolidated Overview
  94. [94] Item 7, MD&A — Consolidated Overview
  95. [95] Item 7, MD&A — Consolidated Overview
  96. [96] Item 7, MD&A — Consolidated Overview
  97. [97] Item 7, MD&A — Consolidated Overview
  98. [98] Item 7, MD&A — Consolidated Overview
  99. [99] Item 7, MD&A — Consolidated Overview
  100. [100] Item 8, Consolidated Statement of Earnings
  101. [101] Item 8, Consolidated Statement of Earnings
  102. [102] Item 8, Consolidated Statement of Earnings
  103. [103] Item 8, Consolidated Statement of Earnings
  104. [104] Item 8, Consolidated Statement of Earnings
  105. [105] Item 8, Consolidated Statement of Earnings
  106. [106] Item 8, Consolidated Statement of Earnings
  107. [107] Item 8, Consolidated Statement of Earnings
  108. [108] Item 7, MD&A — Consolidated Overview
  109. [109] Item 7, MD&A — Consolidated Overview
  110. [110] Item 7, MD&A — Non-GAAP Financial Measures
  111. [111] Item 7, MD&A — Non-GAAP Financial Measures
  112. [112] Item 7, MD&A — Non-GAAP Financial Measures
  113. [113] Item 7, MD&A — Non-GAAP Financial Measures
  114. [114] Item 8, Consolidated Balance Sheet
  115. [115] Item 8, Note K — Debt
  116. [116] Item 8, Consolidated Balance Sheet
  117. [117] Item 8, Note K — Debt
  118. [118] Item 7, MD&A — Other Information — Provision for Income Tax, Net
  119. [119] Item 7, MD&A — Other Information — Provision for Income Tax, Net
  120. [120] Item 8, Note O — Segment Information
  121. [121] Item 8, Note O — Segment Information
  122. [122] Item 8, Note O — Segment Information
  123. [123] Item 8, Note O — Segment Information
  124. [124] Item 8, Note O — Segment Information
  125. [125] Item 8, Note O — Segment Information
  126. [126] Item 8, Note O — Segment Information
  127. [127] Item 8, Note O — Segment Information

Analysis on 6/8/2026