General Dynamics (GD) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 rose 10.3% year-over-year to $13.5 billion, with growth across all segments and Marine Systems up over 20%.

• Net earnings increased to $1.13 billion, and diluted EPS rose 12% to $4.10, both up double digits year-over-year.

• Backlog reached $130.8 billion, up 47.6% year-over-year, with a 2:1 book-to-bill ratio and total estimated contract value at $188.4 billion, up 33%.

• Free cash flow reached $1.95 billion, representing 174%–192% of net earnings, and cash from operations was $2.2 billion.

• Performance exceeded expectations, with robust order intake and strong cash flow supporting record backlog and contract value.

Financial highlights

• Operating earnings grew 12% to $1.42 billion, with operating margin up 10 basis points to 10.5%.

• Net earnings were $1.125 billion, up 13.2% year-over-year.

• Ended the quarter with $3.7 billion in cash and net debt of $4.36 billion, down $1.3 billion sequentially.

• Orders totaled $26.6 billion, driving backlog to $130.8 billion and total estimated contract value to $188.4 billion.

• Paid $405 million in dividends and repurchased $200–$217 million in stock to cover dilution.

Outlook and guidance

• Raised 2026 EPS guidance to $16.45–$16.55, reflecting strong Q1 performance.

• Management expects Q1 and Q4 to be the strongest quarters, with Q4 favored due to volume patterns.

• Free cash flow conversion expected at 100% of net income for the year.

• Capital expenditures projected at 3.5–4% of sales for the full year, with investments ramping up each quarter.

• Continued investment in shipbuilding and combat vehicle development expected to support future growth.