How GD (General Dynamics) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a diversified defense and aerospace contractor like GD Income Statement Overview makes money is essential for investors and anyone interested in the business of defense, aerospace, and advanced technologies. In this post, we break down GD's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick GD Overview

GD Income Statement Overview operates as a leading global defense and aerospace company, providing a broad portfolio of products and services including submarines, combat vehicles, information technology solutions, business jets, and advanced electronics. Revenue comes from four main segments: Marine Systems, Technologies, Aerospace, and Combat Systems. Each segment serves both government and commercial customers, with a strong emphasis on long-term contracts and recurring service revenues.

Revenue Breakdown

• Total Revenue (Q3 2025): $12.9B (+10.6% YoY)
  • Marine Systems Revenue: $4.10B (31.7% of total, +13.8% YoY)
  • Technologies Revenue: $3.33B (25.8% of total, -1.6% YoY)
  • Aerospace Revenue: $3.23B (25.1% of total, +30.3% YoY)
  • Combat Systems Revenue: $2.25B (17.4% of total, +1.8% YoY)
  • Growth is powered by robust demand in Aerospace and Marine Systems, offsetting a slight decline in Technologies.

Gross Profit and Margins

• Gross Profit: $3.84B (29.8% gross margin)
  • Cost of Revenue: $9.06B (+117.4% YoY)
  • GD maintains robust margins due to its diversified portfolio, high-value defense contracts, and operational efficiencies in manufacturing and services.
• Most costs come from direct production expenses, contract fulfillment, and supply chain management.

Operating Income and Expenses

• Operating Income: $1.33B (+12.7% YoY, 10.3% margin)
• Operating Expenses: $1.27B (+99.8% YoY)
  • R&D: Not separately disclosed for Q3 2025
  • SG&A: $1.27B (+99.8% YoY, 9.8% of revenue) — Includes corporate overhead, sales, and administrative functions supporting global operations
  • GD continues to invest in growth and maintain efficiency, balancing innovation with disciplined cost control.

Net Income

• Pre-Tax Income: $1.27B (+14.2% YoY, 9.9% margin)
• Income Tax: $213M (16.7% effective tax rate)
• Net Income: $1.06B (+13.9% YoY, 8.2% net margin)
• GD converts a significant portion of sales into profit due to its scale, contract-driven revenue, and disciplined cost management.

What Drives GD's Money Machine?

• Marine Systems: 31.7% of revenue, driven by U.S. Navy submarine and shipbuilding contracts
• Aerospace: 25.1% of revenue, with strong growth from Gulfstream business jet deliveries (+30.3% YoY)
• SG&A Efficiency: Operating expenses held at 9.8% of revenue, supporting profitability
• Strategic Investments: Ongoing capital allocation to advanced technologies and next-generation defense platforms
• Future Growth Areas: Digital modernization and autonomous systems, though not yet major profit contributors

Visualizing GD's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant costs and investments, 8.2% of revenue drops to the bottom line.

Key Takeaways

• GD's money comes overwhelmingly from defense contracts in Marine Systems and Aerospace
• High gross and net margins illustrate the power of GD's diversified, contract-driven business model
• Heavy investment in advanced technologies, balanced by efficiency in operating costs
• Ongoing growth is driven by strong demand for defense platforms and business jets

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FAQ About GD's Income Statement

1. What is the main source of GD's revenue in 2025?

GD generates over 31% of its revenue from Marine Systems, primarily through U.S. Navy contracts for submarines and ships. Aerospace and Technologies also contribute significantly.

2. How profitable is GD in Q3 2025?

GD reported net income of $1.06B in Q3 2025, with a net margin of approximately 8.2%, reflecting strong profitability driven by scale, contract stability, and cost discipline.

3. What are the largest expense categories for GD?

The biggest expenses on GD's income statement are cost of revenue (direct production and contract costs) and operating expenses, particularly SG&A, which reached $1.27B in Q3 2025 as GD supports global operations and invests in business development.

4. Why does Technologies operate at a loss?

Technologies, despite generating $3.33B in revenue, posted a YoY decline -1.6% and faces margin pressure due to ongoing investments in digital modernization and R&D, which GD believes will drive long-term growth—even if the division is less profitable today.

5. How does GD's effective tax rate compare to previous years?

GD's effective tax rate in Q3 2025 was 16.7%, consistent with previous years. This moderate rate is primarily due to international structuring and available tax credits from R&D and capital investments.