General Dynamics reported a strong start to 2026 with double-digit revenue and earnings growth across all segments, driven by robust demand and excellent cash conversion. The company demonstrated significant operational improvements and a healthy book-to-bill ratio, positioning it well for continued performance.
Revenue increased 10.3% year-over-year to $13.5 billion, with growth in all four segments.
positiveDiluted EPS grew 12% year-over-year to $4.10.
positiveOperating margin improved to 10.5% from 10.4% in the prior year's quarter.
positiveNet cash provided by operating activities was $2.2 billion, representing 192% of net earnings, indicating strong cash conversion.
positiveConsolidated book-to-bill ratio was a strong 2-to-1 for the quarter.
positiveInventories increased by $55 million in the quarter, while unbilled receivables increased by $656 million, indicating potential working capital build-up.
attentionCustomer advances and deposits increased significantly by $764 million, which could indicate longer lead times or upfront payments impacting cash flow timing.
attentionTechnologies segment operating margin slightly compressed to 9.5% from 9.6% in the prior year's quarter.
attentionCorporate operating expenses increased by $5 million, or 15.2%, year-over-year.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
Aerospace | N/A | — | — | — |
Marine Systems | N/A | — | — | — |
Combat Systems | N/A | — | — | — |
Technologies | N/A | — | — | — |
| Total Revenue | $0.00M | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
| Metric | Value | Period | Specificity | vs Prior |
|---|---|---|---|---|
| capital_expenditures | 3.5% and 4% of sales | FY2026 | tight_range | Lowered |
| free_cash_flow_conversion_rate | 100% of net income | FY2026 | point | Maintained |
| earnings_per_diluted_share | $16.45 to $16.55 | FY2026 | tight_range | New |
$3.7 billion · quarter end
$4.4 billion · quarter end
3.5% and 4% of sales · full year
approximately $400 million · quarter
about $200 million · quarter
each quarter
current environment
29 straight years
Businesses had a very good start to the year, delivering strong operating results and excellent cash conversion.
Positioned well to drive additional performance throughout the year.
Strong order activity with a 2-to-1 book-to-bill ratio.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.