GE(GE) - 2025 Q2 - Quarterly Results

Overview and Highlights GE Aerospace reported strong Q2 2025 performance with significant growth across key metrics and an increased capital return plan, alongside an improved operational outlook Q2 2025 Performance and Strategic Highlights GE Aerospace achieved excellent Q2 2025 results with significant growth in key metrics, increased capital returns, and improved operational output, securing major engine deals - CEO H. Lawrence Culp, Jr. highlighted an excellent second quarter, with free cash flow nearly doubling and over 20% growth in orders, revenue, operating profit, and EPS[2] Q2 2025 Key Financial Metrics | Metric | Q2 2025 Result | YoY Growth | | :--- | :--- | :--- | | Total Revenue (GAAP) | $11.0B | +21% | | Adjusted Revenue* | $10.2B | +23% | | Continuing EPS (GAAP) | $1.87 | +56% | | Adjusted EPS* | $1.66 | +38% | | Free Cash Flow* | $2.1B | +92% | - The company plans to increase capital returns to shareholders by 20% to ~$24 billion between 2024 and 2026, and sustain returning at least 70% of free cash flow thereafter[6] - Operational improvements via the FLIGHT DECK initiative led to a 10% sequential improvement in material input at priority supplier sites, contributing to a 45% YoY increase in total engine unit output[7] - Secured the largest widebody engine deal in company history with Qatar Airways for over 400 GE9X and GEnx engines, and another deal with IAG for 32 GEnx-powered Boeing 787s[7] Updated Financial Outlook (2025 & 2028) GE Aerospace raised its 2025 guidance and 2028 outlook, projecting higher operating profit and free cash flow due to strong performance Financial Outlook Summary | | 2025 Guidance (as of July 17, 2025) | 2028 Outlook (as of July 17, 2025) | | :--- | :--- | :--- | | Adjusted revenue* growth | Mid-teens | Double-digit CAGR '24-'28 | | Operating profit* | $8.2 - $8.5 billion | ~$11.5 billion | | Adjusted EPS* | $5.60 - $5.80 | ~$8.40 | | Free cash flow* | $6.5 - $6.9 billion | ~$8.5 billion | - The updated 2028 outlook represents a $1.5 billion increase in both operating profit and free cash flow compared to the outlook provided at the 2024 Investor Day[6] Financial Performance GE Aerospace demonstrated strong financial performance in Q2 2025 and the first half of 2025, driven by robust growth in both consolidated results and segment-specific contributions Consolidated Financial Results GE Aerospace reported strong Q2 2025 consolidated results with significant increases in revenue, operating profit, and free cash flow Q2 2025 Consolidated Non-GAAP Financials | Metric (Non-GAAP) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | $10.15B | $8.22B | +23% | | Operating Profit | $2.34B | $1.90B | +23% | | Adjusted EPS | $1.66 | $1.20 | +38% | | Free Cash Flow (FCF) | $2.11B | $1.10B | +92% | H1 2025 Consolidated Non-GAAP Financials | Metric (Non-GAAP) | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | $19.15B | $16.30B | +18% | | Operating Profit | $4.48B | $3.45B | +30% | | Adjusted EPS | $3.14 | $2.13 | +47% | | Free Cash Flow (FCF) | $3.55B | $2.77B | +28% | Segment Performance Commercial Engines & Services and Defense & Propulsion Technologies segments drove Q2 2025 growth with strong revenue and profit increases Commercial Engines & Services (CES) - Q2 2025 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Orders | $11.7B | +28% | | Revenue | $8.0B | +30% | | Operating Profit | $2.2B | +33% | - CES growth was driven by a 29% increase in services revenue (spare parts and shop visits) and a 35% increase in equipment revenue; the segment now expects high-teens revenue growth for the full year 2025[12][13] Defense & Propulsion Technologies (DPT) - Q2 2025 | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Orders | $2.9B | +24% | | Revenue | $2.6B | +7% | | Operating Profit | $362M | +5% | - DPT growth was driven by higher units and price in Defense & Systems and growth across all businesses in Propulsion & Additive Technologies; the segment maintains its outlook for mid-to-high single-digit revenue growth in 2025[13][14] Financial Statements This section presents the unaudited consolidated financial statements, including the Statement of Operations and Statement of Financial Position, reflecting the company's financial performance and position Statement of Operations (Unaudited) Q2 2025 saw total revenues increase 21% to $11.0 billion, with net income attributable to the company growing 60% to $2.03 billion Q2 2025 Statement of Operations Summary | (In millions) | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $11.02B | $9.09B | +21% | | Net Income from Continuing Operations | $2.00B | $1.32B | +51% | | Net Income Attributable to Company | $2.03B | $1.27B | +60% | | Diluted EPS from Continuing Operations | $1.87 | $1.20 | +56% | Statement of Financial Position (Unaudited) As of June 30, 2025, total assets increased slightly to $125.3 billion, with liabilities also rising, while total equity remained stable Statement of Financial Position Summary | (In millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $125.26B | $123.14B | | Total Liabilities | $105.91B | $103.58B | | Total Equity | $19.35B | $19.56B | Non-GAAP Financial Measures This section explains the company's use of non-GAAP financial measures, providing detailed reconciliations to their GAAP equivalents and clarifying why forward-looking reconciliations are not feasible Explanation and Reconciliation of Non-GAAP Measures This section explains and reconciles non-GAAP measures like Adjusted Revenue, Operating Profit, Adjusted EPS, and FCF to their GAAP equivalents - Management believes non-GAAP measures provide a more complete understanding of underlying operating results and trends of established, ongoing operations[18][24] Q2 2025 Reconciliation of GAAP Profit to Non-GAAP Operating Profit | (In millions) | Q2 2025 | | :--- | :--- | | Profit (GAAP) | $2.39B | | Adjustments | ... | | Operating profit (Non-GAAP) | $2.34B | Q2 2025 Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income | (In millions) | Q2 2025 | | :--- | :--- | | Net income from continuing operations (GAAP) | $2.01B | | Adjustments (net of tax) | ... | | Adjusted net income (Non-GAAP) | $1.78B | Q2 2025 Reconciliation of CFOA to Free Cash Flow (FCF) | (In millions) | Q2 2025 | | :--- | :--- | | Cash flows from operating activities (CFOA) (GAAP) | $2.35B | | Add: gross additions to PP&E | ($327M) | | Less: separation & restructuring cash expenditures | ($84M) | | Free cash flow (FCF) (Non-GAAP) | $2.11B | Guidance Reconciliation Note GE Aerospace cannot provide forward-looking non-GAAP reconciliations due to the unpredictable nature of future items like dispositions and restructuring costs - A reconciliation of forward-looking non-GAAP measures (Operating Profit, Adjusted EPS, FCF) to GAAP is not provided due to the unreasonable effort required to predict the timing and magnitude of certain items like gains/losses on dispositions and restructuring costs[30][31][32] Supplementary Information This section provides important context regarding forward-looking statements, potential risk factors, and an overview of GE Aerospace's global leadership in the aerospace industry Forward-Looking Statements and Risk Factors This report contains forward-looking statements subject to risks including macroeconomic conditions, supply chain issues, and geopolitical factors - The document contains forward-looking statements that are subject to risks and uncertainties which could cause actual results to differ materially[34] - Key risk factors include: - Macroeconomic and market volatility (inflation, supply chain, interest rates) - Geopolitical risks and global economic trends - Demand and financial strength of airframers, airlines, and suppliers - Impact of product safety or quality issues - Execution on business plans and managing production ramps[35][43] About GE Aerospace GE Aerospace is a global leader in aerospace propulsion and services, with a large installed engine base and a global workforce focused on innovation - GE Aerospace is a global leader in its field with an installed base of ~49,000 commercial and ~29,000 military aircraft engines, supported by a team of ~53,000 employees[41]