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

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Understanding how a defense and aerospace conglomerate like GD Income Statement Overview makes money is essential for investors and anyone interested in the business of global defense, marine, aerospace, and technology solutions. 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 diversified defense, aerospace, and marine systems provider. Its business model centers on designing, manufacturing, and servicing military vehicles, submarines, aircraft, and advanced technologies for government and commercial clients.
Revenue comes from four main segments: Marine Systems, Technologies, Aerospace, and Combat Systems. Each segment serves distinct markets, from naval shipbuilding to business jets and secure communications.

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 strong demand in Aerospace and Marine Systems, offsetting a slight decline in Technologies.

Gross Profit and Margins

• Gross Profit: $1.97B (15.2% gross margin)
  • Cost of Revenue: $10.9B (+11.0% YoY)
  • GD maintains moderate margins due to its scale in shipbuilding and defense contracts, but faces cost pressures from materials and labor.
• Most costs come from manufacturing, engineering, and supply chain operations required for large-scale defense and aerospace projects.

Operating Income and Expenses

• Operating Income: $1.33B (+12.7% YoY, 10.3% margin)
• Operating Expenses: $637M (+0.3% YoY)
  • SG&A: $1.27B (+99.8% YoY, 9.8% of revenue) — covers sales, general, and administrative costs, including global marketing, compliance, and support functions.
  • R&D: Not separately disclosed for Q3 2025, but GD invests heavily in advanced defense technologies, cybersecurity, and next-generation aerospace systems.
• GD continues to invest in growth and innovation while maintaining operational efficiency.

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 moderate portion of sales into profit due to its scale, contract pricing power, and operational discipline.

What Drives GD's Money Machine?

• Marine Systems: 31.7% of revenue — Shipbuilding for the U.S. Navy and allied navies is GD's largest revenue driver, with robust order books and long-term contracts.
• Aerospace Growth: Aerospace revenue surged 30.3% YoY, driven by strong demand for business jets and aftermarket services.
• Technology Investments: GD invests in secure communications, cybersecurity, and advanced electronics, positioning for future growth.
• Future Growth Areas: Technologies segment, while currently flat, is focused on next-gen IT and cyber solutions, which may drive future profitability.

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 cost of revenue and SG&A expenses taking the largest chunk.
• Even after significant investments and cost pressures, 8.2% of revenue drops to the bottom line.

Key Takeaways

• GD's money comes overwhelmingly from defense shipbuilding and aerospace manufacturing
• High gross and net margins illustrate the power of GD's contract-driven, diversified business model
• Heavy investment in technology and innovation, balanced by efficiency in operating costs
• Ongoing growth is driven by Aerospace demand and Marine Systems contracts

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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 31.7% of its revenue from Marine Systems, primarily shipbuilding and naval contracts. Other significant sources include Aerospace 25.1%, Technologies 25.8%, and Combat Systems 17.4%.

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 moderate profitability driven by scale, contract pricing, and operational discipline.

3. What are the largest expense categories for GD?

The biggest expenses on GD's income statement are cost of revenue (manufacturing, engineering, supply chain) and SG&A ($1.27B in Q3 2025, 9.8% of revenue), which covers sales, general, and administrative functions. R&D is not separately disclosed but is a strategic focus.

4. Why does Technologies segment operate at a loss?

Technologies, despite generating $3.33B in revenue, posted a YoY decline -1.6% and faces margin pressure due to aggressive investment in cybersecurity and advanced IT solutions, which GD believes will drive long-term growth—even if the division is unprofitable 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 tax benefits from international structuring and share-based compensation.