Financial Trends -- 7/10
Solid, fundamentally healthy defense compounder. FY2025 revenue +10.1% to $52.6B, operating
earnings +11.7%, full-year FCF +23.9% to $3.96B, declining share count (272.4M), and steady
de-leveraging (total debt down to $8.0B from $11.5B in FY21). No red flags, no penalty modifiers.
What keeps it from a top-tier score is trajectory: revenue YoY rates are gently decelerating off
elevated 2024 comps (Aerospace's G700 ramp surge lapped), and segment operating margins are
essentially flat at ~10% rather than expanding the 100+bps a "10" requires.
Weight: 25%
Segment Margin
10.2%
+20bps off trough | Roughly flat
Free Cash Flow
$3.96B
+23.9% YoY | Growing
Total Debt
$8.0B
Down from $11.5B (FY21) | De-levering
Annual Financial Summary (FY ends December)
| Metric ($M) | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | FY25 YoY |
|---|---|---|---|---|---|---|
| Total Revenue | $38,469 | $39,407 | $42,272 | $47,716 | $52,550 | +10.1% |
| Operating Earnings | $4,163 | $4,211 | $4,245 | $4,796 | $5,356 | +11.7% |
| Segment Op Margin | 10.8% | 10.7% | 10.0% | 10.1% | 10.2% | +10bps |
| Net Earnings | $3,257 | $3,390 | $3,315 | $3,782 | $4,210 | +11.3% |
| Diluted EPS (calc) | $11.55 | $12.19 | $12.02 | $13.63 | $15.45 | +13.4% |
| Diluted Shares (M) | 282.0 | 278.2 | 275.7 | 277.5 | 272.4 | -1.8% |
| Free Cash Flow | $3,384 | $3,465 | $3,806 | $3,196 | $3,959 | +23.9% |
| FCF Margin | 8.8% | 8.8% | 9.0% | 6.7% | 7.5% | +80bps |
| Total Debt | $11,495 | $10,496 | $9,261 | $8,762 | $8,013 | -8.5% |
A durable, cash-generative defense compounder.
Revenue compounding ~8% since FY21 to $52.6B, operating earnings +11.7% and net earnings +11.3%
in FY25, full-year FCF recovering +23.9% to $3.96B, a declining share count, and five straight
years of de-leveraging (total debt $11.5B to $8.0B). GAAP equals non-GAAP at GD -- no meaningful
adjusted reconciliation -- so segment operating margin is the relevant profitability metric.
Forward consensus (FMP): FY2026E revenue ~$55.3B, EPS
~$16.70 (~20.6x P/E), EBITDA ~$7.0B; FY2027E revenue ~$57.8B, EPS ~$18.22 (~18.9x). The street
models continued high-single-digit revenue growth and low-double-digit EPS growth -- consistent
with backlog conversion, not an inflection.
Quarterly Trajectory (Q1'23--Q4'25)
| Period | Revenue | Rev YoY | Op Earn | Op Mgn | FCF (Q) |
|---|---|---|---|---|---|
| Q1'23 | $9,881 | — | $938 | 9.5% | $1,301 |
| Q2'23 | $10,152 | — | $962 | 9.5% | $519 |
| Q3'23 | $10,571 | — | $1,057 | 10.0% | $1,094 |
| Q4'23 | $11,668 | — | $1,288 | 11.0% | $892 |
| Q1'24 | $10,731 | +8.6% | $1,036 | 9.7% | ($437) |
| Q2'24 | $11,976 | +18.0% | $1,156 | 9.7% | $613 |
| Q3'24 | $11,671 | +10.4% | $1,181 | 10.1% | $1,215 |
| Q4'24 | $13,338 | +14.3% | $1,423 | 10.7% | $1,805 |
| Q1'25 | $12,223 | +13.9% | $1,268 | 10.4% | ($290) |
| Q2'25 | $13,041 | +8.9% | $1,305 | 10.0% | $1,400 |
| Q3'25 | $12,907 | +10.6% | $1,331 | 10.3% | $1,897 |
| Q4'25 | $14,379 | +7.8% | $1,452 | 10.1% | $952 |
Gently decelerating on a same-quarter basis.
Comparing like quarters across years: Q4'24 +14.3% vs Q4'25 +7.8% (~650bps decel) and Q1'24
+8.6% vs Q1'25 +13.9% (~530bps accel) net to a gentle deceleration off elevated 2024 comps, as
Aerospace lapped its G700-ramp surge. FCF is heavily seasonal -- Q1 routinely negative on a
working-capital build -- so full-year FCF is the meaningful figure.
Segment Revenue & Backlog (FY2025)
| Segment | FY2021 | FY2023 | FY2024 | FY2025 | FY25 YoY | Backlog |
|---|---|---|---|---|---|---|
| Marine Systems | $10,526 | $12,461 | $14,343 | $16,723 | +16.6% | $52,340 |
| Technologies | $12,457 | $12,922 | $13,127 | $13,471 | +2.6% | $16,660 |
| Aerospace | $8,135 | $8,621 | $11,249 | $13,110 | +16.5% | $21,828 |
| Combat Systems | $7,351 | $8,268 | $8,997 | $9,246 | +2.8% | $27,218 |
| Total | $38,469 | $42,272 | $47,716 | $52,550 | +10.1% | $118,046 |
- Marine has overtaken Aerospace as the largest segment (31.8% of revenue), growing +16.6% with a $52.3B backlog
- Combat Systems backlog jumped +60% YoY (from $16,980M to $27,218M) on surging European land-vehicle demand
- Total backlog grew +30% YoY to a record $118.0B (from $90,597M) — multi-year revenue visibility
- Technologies is the drag (+2.6%), a fragmented, recompete-driven federal-IT business
Key trends
- Revenue compounding to $52.6B: +10.1% in FY25, but YoY rates gently decelerating off elevated 2024 comps as Aerospace lapped its G700-ramp surge (Q4 Aerospace +1.2%)
- Operating margins roughly flat at ~10%: 10.0% FY23 → 10.2% FY25, +20bps off the trough — gated by lower-margin Marine growing fastest and Technologies stagnation
- FCF recovering and growing: $3,196M FY24 → $3,959M FY25 (+23.9%); FCF margin 6.7% → 7.5%
- Share count declining: 282.0M FY21 → 272.4M FY25 (-1.8%), modest net buyback, no dilution
- De-leveraging every year: total debt $11,495M FY21 → $8,013M FY25 (-8.5% in FY25)
Score Rationale
Score of 7/10 reflects a solid, fundamentally healthy financial profile with no red flags — but a steady rather than inflecting trajectory.
Supports 7/10:
- FY2025 revenue +10.1% to $52.6B, operating earnings +11.7%, net earnings +11.3%
- Full-year FCF +23.9% to $3.96B, FCF margin recovering 6.7% → 7.5%
- Declining share count (272.4M) with no dilution
- Steady de-leveraging (total debt $11.5B → $8.0B since FY21)
- Record $118.0B backlog (+30% YoY) underpins multi-year revenue visibility
What caps it below top-tier:
- Revenue YoY gently decelerating off elevated 2024 comps (Aerospace G700 ramp lapped, Q4 Aerospace +1.2%)
- Segment operating margins essentially flat at ~10% (+20bps off trough, <100bps) rather than expanding
- Margin upside gated by lower-margin Marine growing fastest and Technologies stagnation
Penalty checks: negative FCF, dilution >10%, revenue up / op income down, debt growing faster than revenue 3+ quarters — none apply. Durable growth and improving cash conversion, but a steady-7 rather than an inflecting profile.
Data sourced from Daloopa (company_id: 403). Fiscal year ends December 31. Forward consensus per FMP. All financials in USD.