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

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Understanding how a diversified industrial and technology leader like GE makes money is essential for investors and anyone interested in the business of advanced manufacturing, energy, and healthcare. 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.

Quick GE Overview

GE operates as a global leader in industrial technology, providing products and services across aviation, energy, healthcare, and related segments. Revenue comes primarily from services (maintenance, digital solutions, and long-term contracts) and equipment sales (jet engines, turbines, medical devices). The company’s business segments include Aviation, Power, Renewable Energy, and Healthcare, each contributing to its diversified income streams.

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 expanding service contracts, strong equipment demand, and innovation in advanced manufacturing.

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 service model, high-value equipment, and operational efficiencies.
• Most costs come from manufacturing, service delivery, and supply chain operations.

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 aviation technology, energy systems, and healthcare innovation
  • SG&A: $1.195B (-41.5% YoY, 9.8% of revenue) — includes sales, general, and administrative costs, reflecting improved cost discipline
  • GE continues to prioritize innovation and invest in growth while maintaining efficiency and streamlining 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, operational efficiency, and pricing power.

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What Drives GE's Money Machine?

• Services Revenue: 67%+ of revenue comes from long-term service contracts, maintenance, and digital solutions for aviation and energy assets.
• Equipment Sales: Strong demand for jet engines, turbines, and medical devices drives 29% of revenue, with notable YoY growth.
• R&D Investment: $415M in Q3 2025, targeting next-gen aviation, energy transition, and healthcare technologies.
• Future Growth Areas: Renewable energy and digital industrial solutions, though not yet profitable, are strategic priorities for long-term expansion.

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 operational costs, 17.6% of revenue drops to the bottom line.

Key Takeaways

• GE's money comes overwhelmingly from services contracts in aviation and energy
• High gross and net margins illustrate the power of GE's scalable, diversified business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by expanding service offerings, equipment innovation, and operational discipline

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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 services contracts, primarily in aviation and energy. Equipment sales account for nearly 29%, with other segments contributing smaller shares.

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) at $415M and Sales, General & Administrative (SG&A) at $1.195B in Q3 2025, as GE prioritizes innovation in aviation, energy, and healthcare.

4. Why does Renewable Energy operate at a loss?

Renewable Energy, despite generating significant revenue, posted an operating loss in Q3 2025. This is because GE aggressively invests in next-generation wind, grid, and digital solutions, 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 international structuring and tax benefits from share-based compensation.