General Dynamics (GD) firmly posted $12.9 billion in revenue for the fiscal 2025 third quarter, marking an impressive 10.6% jump over the same period last year. The Reston, Virginia-based powerhouse demonstrated exceptional financial discipline, achieving $1.3 billion in operating earnings and driving diluted earnings per share (EPS) up 15.8% to $3.88.
This stellar performance underscores a strong operational environment, with the company expanding its operating margin to 10.3%, a 20-basis-point increase year-over-year.
Record Order Activity Bolsters Future Contracts
The company’s ability to secure future work remained a key differentiator. New orders swelled to $19.3 billion during the quarter, resulting in a consolidated book-to-bill ratio of 1.5-to-1.
The crucial Defense segments led the way, recording a robust 1.6-to-1 book-to-bill ratio. This signifies that the company received $1.60 in new orders for every dollar of revenue it recorded, successfully restocking its pipeline. General Dynamics now holds a massive $109.9 billion in firm backlog, forming the core of its $167.7 billion in total contract value.
Aerospace Segment Delivers Turbo-Charged Growth
While the Defense segments maintain foundational stability for the company, the Aerospace segment delivered a particularly impressive quarter. This segment grew its revenue by 30.3% and expanded its margins by 100 basis points from the previous year, primarily driven by strong order activity for its Gulfstream business jets. The Aerospace sector’s strong 1.3-to-1 book-to-bill ratio shows that demand for its high-end civilian aviation products remains exceptionally high.
Chief Executive Officer Phebe Novakovic confirmed that all four of the company’s segments grew both earnings and backlog in the third quarter, a unified performance that solidifies the firm’s market leadership. General Dynamics continues to focus on value creation, generating $2.1 billion in operating cash flow during the period.
For GovCon Partners: Seizing the Momentum
General Dynamics’ financial strength and massive, growing backlog signal stability and opportunity across the entire government contracting ecosystem. Whether you are a small business supplier or a major sub-contracting partner, GD’s success creates market certainty.
Success Tips for the GovCon Community
- Master the Supply Chain: General Dynamics’ ability to execute on its massive contracts relies heavily on its supply chain. If you provide components or services, focus on supply chain resiliency, quality control, and on-time delivery. Your reliability directly influences GD’s ability to meet government deadlines.
- Focus on Specific Backlog Needs: The 1.6-to-1 Defense book-to-bill ratio is a clear indicator of where GD will spend money in the next few years. Analyze their recent large awards, particularly those from the Department of Defense or the U.S. Navy, and align your capabilities (e.g., IT modernization, advanced manufacturing, sustainment) directly to those programs.
- Innovate for Efficiency: With operating margins at 10.3%, GD prioritizes efficiency. Develop proposals that not only solve technical challenges but also demonstrably lower program costs or accelerate deployment schedules through new technology or process improvements.
