Second Quarter 2026
Filed Jul 29, 2026General Dynamics Reports Second-Quarter 2026 Financial Results
Second-quarter revenue increased 8.1%, operating earnings increased 11.9%, diluted EPS increased 13.4%, operating margin expanded 40 basis points, and company-wide book-to-bill was 1.4-to-1.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $ 14,094 | – | 8.1 % |
| Operating costs and expensesGAAP | (12,634) | – | – |
| Operating earningsGAAP | 1,460 | – | 11.9 % |
| Operating marginGAAP | 10.4 % | – | – |
| Other, netGAAP | (4) | – | – |
| Interest, netGAAP | (49) | – | – |
| Earnings before income taxGAAP | 1,407 | – | 14.2 % |
| Provision for income tax, netGAAP | (247) | – | – |
| Net earningsGAAP | $ 1,160 | – | 14.4 % |
| Earnings per share—basicGAAP | $ 4.29 | – | 13.5 % |
| Basic weighted average shares outstandingGAAP | 270.2 | – | – |
| Earnings per share—dilutedGAAP | $ 4.24 | – | 13.4 % |
| Diluted weighted average shares outstandingGAAP | 273.5 | – | – |
| Net cash provided by operating activitiesGAAP | $ 1,880 | – | – |
| Capital expendituresother | (234) | – | – |
| Free cash flownon-GAAP | $ 1,646 | – | – |
| Defense segment ordersother | $14.7 billion | – | – |
| Aerospace ordersother | $5.3 billion | – | – |
| Company-wide book-to-bill ratioother | 1.4-to-1 | – | – |
| Backlog at the end of the quarterother | $136.5 billion | – | – |
| Estimated potential contract valueother | $50.4 billion | – | – |
| Total estimated contract valueother | $186.9 billion | – | – |
| Six-month revenueGAAP | $ 27,575 | – | 9.1 % |
| Six-month operating earningsGAAP | 2,880 | – | 11.9 % |
| Six-month net earningsGAAP | $ 2,285 | – | 13.8 % |
| Six-month earnings per share—dilutedGAAP | $ 8.35 | – | 12.8 % |
| Six-month net cash provided by operating activitiesGAAP | $ 4,035 | – | – |
| Six-month free cash flownon-GAAP | $ 3,598 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AerospaceRevenue increased 15.1 %, and operating margin was 14.5 % versus 13.2 %. | $ 3,525 | – | 15.1 % |
| Marine SystemsRevenue increased 10.4 %, and operating margin was 7.3 % versus 6.9 %. | 4,660 | – | 10.4 % |
| Combat SystemsRevenue increased 0.3 %, while operating earnings were $ 318 versus $ 324 and operating margin was 13.9 % versus 14.2 %. | 2,290 | – | 0.3 % |
| TechnologiesRevenue increased 4.1 %, while operating margin was 9.4 % versus 9.6 %. | 3,619 | – | 4.1 % |
Capital returns
- During the quarter, the company paid $429 million in dividends.
- During the quarter, the company reduced total debt by $498 million.
- Dividends paid were (834) for the six months ended July 5, 2026, versus (785) for the six months ended June 29, 2025.
- Purchases of common stock were (319) for the six months ended July 5, 2026, versus (600) for the six months ended June 29, 2025.
What drove it
- Revenue increased across all four segments.
- Aerospace revenue increased 15.1 % and operating earnings increased 26.6 %.
- Marine Systems revenue increased 10.4 % and operating earnings increased 17.5 %.
- Aerospace book-to-bill ratio was 1.5x, versus 1.3x in the second quarter of 2025.
- Gulfstream Aircraft Deliveries totaled 41 units, versus 38 units: 35 large-cabin aircraft versus 32 and 6 mid-cabin aircraft versus 6.
- The company cited ongoing efforts to increase the pace of execution and deliver on backlog, and significant investments to increase output to meet strong and growing demand.
Concerns
- Combat Systems operating earnings decreased (1.9) % to $ 318 from $ 324, and operating margin declined to 13.9 % from 14.2 %.
- Technologies operating margin declined to 9.4 % from 9.6 %, despite 4.1 % revenue growth.
- Corporate operating earnings were (49), versus (45).
- The filing did not provide forward financial guidance.
What to watch
- Execution against backlog of $136.5 billion and total estimated contract value of $186.9 billion.
- Whether Aerospace and Marine Systems sustain their reported margin expansion.
- Whether Combat Systems can improve operating earnings and margin following the reported declines.
- Order conversion following 1.4-to-1 company-wide book-to-bill and $20 billion of quarterly orders.
- Cash conversion and deployment following $1.9 billion of quarterly cash from operating activities, $429 million of dividends, $234 million of capital expenditures, and $498 million of debt reduction.
Balance sheet and cash flow
- The company ended the quarter with $7.5 billion in total debt and $4.3 billion in cash and equivalents on hand.
- Cash and equivalents were $ 4,333 at July 5, 2026, versus $ 2,333 at December 31, 2025.
- Total debt was $ 7,516 at July 5, 2026, versus $ 8,013 at December 31, 2025.
- Net debt was $ 3,183 at July 5, 2026, versus $ 5,680 at December 31, 2025.
- Net cash provided by operating activities in the quarter totaled $1.9 billion, or 162% of net earnings.
- Customer advances and deposits were 11,034 at July 5, 2026, versus 9,824 at December 31, 2025.
- Unbilled receivables were 9,255 at July 5, 2026, versus 8,380 at December 31, 2025.
- Net increase in cash and equivalents was 2,000 for the six months ended July 5, 2026, versus net decrease in cash and equivalents of (174) for the six months ended June 29, 2025.
Analysis
General Dynamics reported a strong second quarter. Revenue was $ 14,094 versus $ 13,041, an increase of 8.1 %, while operating earnings rose 11.9 % to 1,460. Net earnings increased 14.4 % to $ 1,160 and diluted EPS increased 13.4 % to $ 4.24. The company reported a 10.4 % operating margin, compared with 10.0 % in the year-ago quarter.
All four segments produced revenue growth. Aerospace was the leading contributor, with revenue up 15.1 % to $ 3,525 and operating earnings up 26.6 % to $ 510; its margin expanded to 14.5 % from 13.2 %. Marine Systems revenue increased 10.4 % to 4,660, operating earnings increased 17.5 % to 342, and margin increased to 7.3 % from 6.9 %. Gulfstream aircraft deliveries rose to 41 units from 38 units, while Aerospace orders rose to $ 5,278 from $ 4,003 and the segment book-to-bill ratio increased to 1.5x from 1.3x.
The weaker points were Combat Systems and Technologies margins. Combat Systems revenue increased 0.3 % to 2,290, but operating earnings declined (1.9) % to $ 318 and margin fell to 13.9 % from 14.2 %. Technologies revenue increased 4.1 % to 3,619 and operating earnings increased 2.1 % to 339, but margin declined to 9.4 % from 9.6 %. These trends contrast with the higher Aerospace and Marine Systems profitability that drove company operating-margin expansion.
Cash generation and balance-sheet actions were substantial. Quarterly net cash provided by operating activities totaled $1.9 billion, or 162% of net earnings, and free cash flow was $ 1,646. The company paid $429 million in dividends, invested $234 million in capital expenditures, and reduced total debt by $498 million during the quarter. At July 5, 2026, cash and equivalents were $ 4,333, total debt was $ 7,516, and net debt was $ 3,183.
Demand indicators were strong, with $20 billion of quarterly orders, a 1.4-to-1 company-wide book-to-bill ratio, $136.5 billion of backlog, and $186.9 billion of total estimated contract value. The filing included no forward financial guidance, so the key reported evidence for future activity is the order and backlog position rather than a company outlook.
Management, verbatim
Our businesses delivered solid results in the quarter, with revenue growth across all four segments – including double-digit increases in revenue and noteworthy margin expansion in Aerospace and Marine Systems – reflecting our ongoing efforts to increase the pace of execution and deliver on our backlog.
Phebe Novakovic, chairman and chief executive officer
We are well positioned to support our customers’ needs and are continuing to make significant investments to increase output to meet strong and growing demand.
Phebe Novakovic, chairman and chief executive officer
Not in the filing
stated, not guessed- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Forward EPS guidance
- Previous-release outlook for comparison
- Gross margin
- Quarter-over-quarter comparisons for revenue, earnings, EPS, segment revenue, segment operating earnings, margins, cash flow, or orders
- Second-quarter segment-specific revenue drivers beyond the company statement that all four segments had revenue growth
- Second-quarter cash flow statement detail beyond net cash provided by operating activities, capital expenditures, and free cash flow
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.