How GE (General Electric Company) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a diversified industrial leader like GE makes money is essential for investors and anyone interested in the business of advanced manufacturing, services, and technology. In this post, we break down GE'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.

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Quick GE Overview

GE operates as a global industrial conglomerate, focusing on sectors such as energy, aviation, healthcare, and advanced manufacturing. Revenue comes primarily from services (including maintenance, upgrades, and digital solutions for industrial equipment) and equipment sales (such as turbines, jet engines, and medical devices). The company also reports a small portion of revenue from corporate and other sources, reflecting its diversified business segments.

Revenue Breakdown

• Total Revenue (Q3 2025): $12.2B (+24.2% YoY)
  • Services Revenue: $8.215B (67.2% of total, +24.0% YoY)
  • Equipment Revenue: $3.493B (28.6% of total, +33.2% YoY)
  • Corporate & Other Revenue: $0.473B (3.9% of total, -20.6% YoY)
  • Other Revenue by Product 1: $0.040B (0.3% of total, +3,900% YoY)
• Growth is powered by robust demand for industrial services, strong equipment sales in aviation and energy, and strategic expansion in high-growth product categories.

Gross Profit and Margins

• Gross Profit: $4.459B (36.5% gross margin)
  • Cost of Revenue: $7.762B (+24.7% YoY)
  • GE maintains robust margins due to its scalable digital service model, high-value equipment offerings, and operational efficiencies across manufacturing and service delivery.
• Most costs come from manufacturing, supply chain logistics, and service delivery for installed equipment.

Operating Income and Expenses

• Operating Income: $2.796B (+125.3% YoY, 22.9% margin)
• Operating Expenses: $1.663B (-30.0% YoY)
  • R&D: $0.415B (+25.4% YoY, 3.4% of revenue) — Focused on next-generation aviation, energy transition technologies, and digital industrial solutions.
  • SG&A: $1.195B (-41.5% YoY, 9.8% of revenue) — Includes global sales, administrative functions, and corporate overhead.
  • GE continues to prioritize innovation in core technologies while maintaining efficiency through cost controls and streamlined operations.

Net Income

• Pre-Tax Income: $2.515B (+32.9% YoY, 20.6% margin)
• Income Tax: $0.344B (13.7% effective tax rate)
• Net Income: $2.157B (+16.5% YoY, 17.6% net margin)
• GE converts a significant portion of sales into profit due to its scalable service model, disciplined cost management, and pricing power in premium equipment markets.

What Drives GE's Money Machine?

• Services Revenue: 67%+ of revenue, driven by long-term maintenance contracts, upgrades, and digital solutions for installed equipment.
• Equipment Sales Growth: Aviation and energy equipment sales surged, with equipment revenue up 33.2% YoY.
• Strategic R&D Investment: $415M in Q3 2025, targeting sustainable energy, advanced manufacturing, and digital transformation.
• Emerging Product Lines: "Other Revenue by Product 1" grew 3,900% YoY, signaling early traction in new technology segments, though not yet profitable.

Visualizing GE'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 and R&D) taking the largest chunk.
• Even after large investments in innovation and efficiency, 17.6% of revenue drops to the bottom line.

Key Takeaways

• GE's money comes overwhelmingly from industrial services and equipment sales
• High gross and net margins illustrate the power of GE's scalable, service-driven business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by aviation and energy equipment sales, digital solutions, and expansion into new product categories

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FAQ About GE's Income Statement

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

GE generates over 67% of its revenue from industrial services, including maintenance, upgrades, and digital solutions for installed equipment. Equipment sales account for nearly 29%, with the remainder from corporate and emerging product lines.

2. How profitable is GE in Q3 2025?

GE reported net income of $2.157B in Q3 2025, with a net margin of approximately 17.6%, reflecting strong profitability driven by scalable services and disciplined cost management.

3. What are the largest expense categories for GE?

The biggest expenses on GE's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $415M in Q3 2025, as GE prioritizes innovation in aviation, energy, and digital industrial solutions.

4. Why does Corporate & Other Revenue operate at a loss?

Corporate & Other Revenue, despite generating $473M in revenue, posted an operating loss in Q3 2025. This is because GE aggressively invests in emerging technologies and strategic initiatives, believing these will drive long-term growth—even if the division is unprofitable today.

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

GE's effective tax rate in Q3 2025 was 13.7%, consistent with previous years. This moderate rate is primarily due to tax benefits from share-based compensation and international structuring.