Aerospace and defense company General Dynamics (NYSE:GD) reported Q1 CY2025 results topping the market’s revenue expectations , with sales up 13.9% year on year to $12.22 billion. Its non-GAAP profit of $3.66 per share was 5.3% above analysts’ consensus estimates.

Is now the time to buy GD? Find out in our full research report (it’s free).

  • Revenue: $12.22 billion vs analyst estimates of $12 billion (13.9% year-on-year growth, 1.8% beat)

  • Adjusted EPS: $3.66 vs analyst estimates of $3.48 (5.3% beat)

  • Adjusted EBITDA: $1.49 billion vs analyst estimates of $1.45 billion (12.2% margin, 2.7% beat)

  • Operating Margin: 10.4%, in line with the same quarter last year

  • Free Cash Flow was -$290 million compared to -$437 million in the same quarter last year

  • Backlog: $88.66 billion at quarter end, down 5.4% year on year

  • Market Capitalization: $71.21 billion

General Dynamics’ Q1 results were primarily driven by increased aircraft deliveries and ongoing momentum in its defense businesses. CEO Phebe Novakovic highlighted the ramp-up in Gulfstream G700 deliveries and noted, “We saw improved margins on our G700 deliveries,” pointing to the introduction of newer models as a significant factor. The Technologies segment also contributed with consistent order activity, while Combat and Marine Systems benefited from stable demand and productivity gains, though supply chain challenges persisted.

Looking forward, management discussed the potential impact of recently announced tariffs and evolving government procurement priorities, particularly in aerospace. Novakovic acknowledged uncertainty, stating, “We do not know the scope and breadth of the tariffs issue at the moment and will not for a while.” The company expects improved cash flow in the coming quarters, but remains cautious about macroeconomic risks and ongoing discussions with government customers regarding cost savings and contract structures.

General Dynamics’ first quarter performance reflected robust aircraft deliveries and stable demand across core defense segments, with management addressing both operational improvements and emerging uncertainties.

  • Gulfstream G700 Drives Aerospace: The significant year-on-year increase in Aerospace revenue was attributed to a 50% rise in aircraft deliveries, including the introduction of 13 G700 jets. Margins in this segment improved due to scale and the gradual resolution of supply chain issues, though management noted the delivery cadence will normalize through the year.

  • G800 Certification Completed: The recent certification of the G800 by U.S. and European aviation authorities positions the company for expanded deliveries and future demand stimulation. Management expects the G800’s entry into service to support ongoing aerospace growth.

  • Technologies Segment Order Strength: Technologies reported a book-to-bill ratio above 1.0, supported by demand for advanced IT and mission systems solutions. Management noted ongoing customer conversations around cost savings and contract structures, particularly outcome-based contracts, which could shape future margins.

  • Defense Segment Steady, but Supply Chain a Challenge: Combat and Marine Systems continued to see strong demand, especially from European customers and the U.S. Navy. However, Novakovic acknowledged persistent supply chain delays and quality issues, as well as the need for ongoing workforce expansion and productivity gains in shipbuilding.

  • Tariff and Macroeconomic Uncertainty: Management raised concerns regarding the potential impact of new tariffs on both aerospace and defense businesses but stopped short of providing estimates, citing a lack of clarity on how these might affect demand and cost structures in coming quarters.