Willis Lease Finance Corporation Reports First Quarter 2025 Financial Results

Rhea-AI Summary

Willis Lease Finance Corporation (WLFC) reported strong Q1 2025 financial results with record quarterly revenue of $157.7 million, up 32.5% year-over-year. The company achieved pre-tax income of $25.3 million and declared a quarterly dividend of $0.25 per share. Key highlights include:

• Lease rent revenue increased 28.1% to $67.7 million
• Maintenance reserve revenue grew 25% to $54.9 million
• Spare parts and equipment sales reached $18.2 million
• Portfolio utilization improved to 86.4% from 76.7%

The company's lease portfolio value stood at $2.82 billion as of March 31, 2025, comprising 347 engines, 15 aircraft, one marine vessel, and other equipment. Growth was driven by strong aviation market conditions and increased demand for leasing solutions as airlines seek to avoid expensive engine shop visits.

Positive

• Record quarterly revenue of $157.7 million, up 32.5% YoY
• Strong lease rent revenue growth of 28.1% to $67.7 million
• Maintenance reserve revenue increased 25% to $54.9 million
• Significant improvement in portfolio utilization to 86.4%
• Spare parts sales jumped to $18.2 million from $3.3 million
• Quarterly dividend of $0.25 per share declared

Negative

• General and administrative expenses increased by $11.4 million due to sustainable aviation fuel project costs
• Lease portfolio value decreased from $2.87 billion to $2.82 billion quarter-over-quarter
• Lower gain on sale of leased equipment ($4.4 million vs $9.2 million YoY)
• Market volatility concerns due to tariffs

Insights

Financial Analyst

WLFC delivered record Q1 revenue of $157.7M (up 32.5%), driven by strong performance across all revenue streams and improved asset utilization.

Willis Lease Finance Corporation has delivered exceptional first quarter results for 2025, with record quarterly revenue of $157.7 million, representing a 32.5% year-over-year increase. This impressive top-line growth was accompanied by solid pre-tax income of $25.3 million.

The company demonstrated strength across multiple revenue streams. Lease rent revenue reached $67.7 million, growing 28.1% compared to Q1 2024. Maintenance reserve revenue increased by 25.0% to $54.9 million. These core leasing and maintenance activities generated $122.6 million in aggregate, a 27% increase year-over-year.

Particularly noteworthy was the dramatic improvement in spare parts and equipment sales, which jumped to $18.2 million from $3.3 million in the comparable period. While this increase was partially influenced by a discrete $7.0 million sale, it nevertheless reflects heightened demand for surplus material as operators extend the lives of their current generation engine portfolios.

Asset utilization metrics show significant operational improvement, with portfolio utilization increasing to 86.4% at quarter end, compared to 76.7% at year-end 2024. This 9.7 percentage point increase indicates more efficient deployment of the company's lease assets.

The company's balance sheet remains substantial, with a lease portfolio valued at $2,819.5 million as of March 31, 2025, consisting of 347 engines, 15 aircraft, one marine vessel, and other leased parts and equipment. This represents a slight decrease from $2,872.3 million at December 31, 2024, likely reflecting the sale of assets during the quarter.

The $0.25 quarterly dividend declaration signals management's confidence in sustained cash flow generation. General and administrative expenses were elevated due to $11.4 million in consultant fees related to a sustainable aviation fuel project, which the company is currently expensing rather than capitalizing in line with GAAP requirements.

Aviation Industry Expert

WLFC benefits from airlines avoiding expensive engine shop visits by leasing, with increasing new engine costs driving demand despite tariff-related market volatility.

The robust financial performance from Willis Lease demonstrates the growing strategic value of engine leasing and maintenance solutions in today's aviation marketplace. Airlines are increasingly turning to WLFC's services to avoid protracted and expensive engine shop visits – a trend that accelerated post-pandemic as maintenance backlogs grew and engine overhaul costs skyrocketed.

Current market dynamics strongly favor WLFC's business model. The rising cost of new engines continues to push operators toward leasing rather than purchasing outright, creating fertile ground for WLFC's core business. This explains the impressive 28.1% growth in lease rent revenue and the substantial improvement in portfolio utilization to 86.4%.

The dramatic increase in spare parts sales to $18.2 million reflects a critical industry trend: airlines are increasingly extending the operational lives of their current generation engine portfolios rather than committing to costly replacements. This approach requires more frequent component replacements and creates robust demand for the surplus material that WLFC supplies.

The company's maintenance capabilities are proving particularly valuable for cost-conscious airlines, as evidenced by the 25.0% increase in maintenance reserve revenue. Engines on lease with "non-reimbursable" usage fees generated $45.3 million of short-term maintenance revenues for the quarter, up from $37.6 million a year earlier, showing strong utilization of leased assets.

The CEO's mention of "concerns over tariffs" creating market volatility warrants attention, as recent trade tensions could impact supply chains and potentially the cost of aircraft and engine components. However, such disruptions may ultimately benefit WLFC by making new purchases even less attractive relative to leasing and maintenance options.

The company's investment in a sustainable aviation fuel project, while currently representing a $11.4 million expense, positions WLFC to participate in the industry's sustainability transition – crucial as airlines face increasing pressure to reduce carbon emissions.

Delivers Pre-Tax Income of $25.3 Million and Record Quarterly Revenue of $157.7 Million

Declares Second Quarter 2025 Dividend of $0.25 Per Share

COCONUT CREEK, Fla., May 06, 2025 (GLOBE NEWSWIRE) -- Willis Lease Finance Corporation (NASDAQ: WLFC) (“WLFC” or the “Company”), the leading lessor of commercial aircraft engines and global provider of aviation services, today announced its financial results for the first quarter ended March 31, 2025. The Company also announced a quarterly dividend of $0.25 per share, payable on May 22, 2025, to shareholders of record as of the close of business on May 12, 2025.

First Quarter 2025 Highlights (All metrics compared to first quarter 2024, except where noted)

• Total, record, quarterly revenues of $157.7 million, an increase of 32.5%
• Solid quarterly pre-tax income of $25.3 million
• Lease rent revenue of $67.7 million, an increase of 28.1%
• Maintenance reserve revenue of $54.9 million, an increase of 25.0%
• Spare parts and equipment sales of $18.2 million, compared to $3.3 million
• Portfolio utilization increased to 86.4% at quarter end, compared to 76.7% at year end 2024

For the three months ended March 31, 2025, total revenue was $157.7 million, up 32.5% as compared to $119.1 million for the same period in 2024. For the first quarter of 2025, core lease rent and maintenance reserve revenues were $122.6 million in the aggregate, up 27% as compared to $96.8 million for the same period in 2024. The growth was predominantly driven by core, recurring lease and maintenance revenues associated with the continued strength of the aviation marketplace, as airlines leverage the Company’s leasing, parts and maintenance capabilities to avoid protracted, expensive engine shop visits.

“WLFC’s strong first quarter 2025 financial results reflect the strength in our business model, which enables us to provide advanced and efficient solutions to airlines,” said Austin C. Willis, Chief Executive Officer of WLFC. “While concerns over tariffs have created market volatility, we remain confident in the drivers of our business. The cost of new engines continues to drive operators towards leasing, and our maintenance capabilities and programs provide value and certainty for cost conscious airlines.”

First Quarter 2025 Operating Results

Maintenance reserve revenue for the quarter ended March 31, 2025, was $54.9 million, compared to $43.9 million for the quarter ended March 31, 2024, reflecting the increased size of the Company’s lease portfolio and leases on short-term lease conditions.

Engines on lease with “non-reimbursable” usage fees generated $45.3 million of short-term maintenance revenues for the quarter ended March 31, 2025, compared to $37.6 million for the quarter ended March 31, 2024.

During the first quarter of 2025, the Company recognized $9.6 million of long-term maintenance revenue, compared to $6.3 million for the quarter ended March 31, 2024. Long-term maintenance revenue is recognized at the end of a lease period as the related maintenance reserve liability is released from the balance sheet.

Spare parts and equipment sales increased to $18.2 million for the quarter ended March 31, 2025, compared to $3.3 million for the quarter ended March 31, 2024. The year-over-year increase in spare parts sales reflects the heightened demand for surplus material as operators extend the lives of their current generation engine portfolios. The increase was influenced by a discrete $7.0 million sale. Equipment sales for the three months ended March 31, 2025, were $2.2 million for the sale of one engine. There were no equipment sales for the three months ended March 31, 2024.

For the quarter ended March 31, 2025, the gain on sale of leased equipment was $4.4 million, reflecting the sale of seven engines, one airframe, and other parts and equipment from the lease portfolio. During the three months ended March 31, 2024, the Company sold eight engines and other parts and equipment for a net gain of $9.2 million.

General and administrative expenses were influenced by an $11.4 million increase in consultant-related fees predominantly related to the Company’s sustainable aviation fuel project. As the project is in its early design stage, we have expensed the related costs, which is in line with accounting principles generally accepted in the United States (“GAAP”).

The book value of lease assets owned either directly or through WLFC’s joint ventures, inclusive of the Company’s equipment held for operating lease, maintenance rights, notes receivable, and investments in sales-type leases was $3,219.9 million as of March 31, 2025.

Balance Sheet

As of March 31, 2025, the Company’s lease portfolio was $2,819.5 million, consisting of $2,597.8 million of equipment held in its operating lease portfolio, $179.3 million of notes receivable, $25.2 million of maintenance rights, and $17.3 million of investments in sales-type leases, which represented 347 engines, 15 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2024, the Company’s lease portfolio was $2,872.3 million, consisting of $2,635.9 million of equipment held in its operating lease portfolio, $183.6 million of notes receivable, $31.1 million of maintenance rights, and $21.6 million of investments in sales-type leases, which represented 354 engines, 16 aircraft, one marine vessel and other leased parts and equipment.

Conference Call

WLFC will hold a conference call today at 10:00 a.m. Eastern Daylight Time to discuss its first quarter 2025 results. To participate in the conference call or webcast, please use the following dial-in numbers or visit the webcast link.

U.S. and Canada: +1 (800) 289-0459
International: +1 (646) 828-8082
Conference ID: 578662
https://event.webcasts.com/starthere.jsp?ei=1716437&tp_key=f56060bee8

A replay of the conference call will be available two hours after the completion of the conference call. To access the replay, please visit our website at www.wlfc.global under the Investor Relations section for details.

About Willis Lease Finance Corporation

Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Additionally, through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services.

Forward-Looking Statements

Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Any forward-looking statement made by the Company is based only on information currently available to the Company and speaks only as of the date on which it is made. We undertake no obligation to update them, except as may be required by law. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as war, terrorist activity and pandemics; changes in oil prices, rising inflation and other disruptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.

Contact:	Scott B. Flaherty
	Executive Vice President & Chief Financial Officer
	561.413.0112

Unaudited Condensed Consolidated Statements of Income
(In thousands, except per share data) 

	Three months ended March 31,
		2025				2024			% Change
REVENUE
Lease rent revenue	$	67,739			$	52,881				28.1	%
Maintenance reserve revenue		54,859				43,870				25.0	%
Spare parts and equipment sales		18,240				3,288				454.7	%
Interest revenue		3,934				2,269				73.4	%
Gain on sale of leased equipment		4,437				9,201				(51.8)	%
Gain on sale of financial assets		378				—			nm
Maintenance services revenue		5,586				5,227				6.9	%
Other revenue		2,559				2,347				9.0	%
Total revenue		157,732				119,083				32.5	%
EXPENSES
Depreciation and amortization expense		25,024				22,486				11.3	%
Cost of spare parts and equipment sales		15,323				2,705				466.5	%
Cost of maintenance services		5,329				5,574				(4.4)	%
Write-down of equipment		2,109				261				708.0	%
General and administrative		47,720				29,581				61.3	%
Technical expense		6,230				8,255				(24.5)	%
Net finance costs:
Interest expense		32,094				23,003				39.5	%
Total net finance costs		32,094				23,003				39.5	%
Total expenses		133,829				91,865				45.7	%
Income from operations		23,903				27,218				(12.2)	%
Income from joint ventures		1,351				2,674				(49.5)	%
Income before income taxes		25,254				29,892				(15.5)	%
Income tax expense		8,385				9,023				(7.1)	%
Net income		16,869				20,869				(19.2)	%
Preferred stock dividends		1,323				900				47.0	%
Accretion of preferred stock issuance costs		70				12				483.3	%
Net income attributable to common shareholders	$	15,476			$	19,957				(22.5)	%
Basic weighted average income per common share	$	2.34			$	3.12
Diluted weighted average income per common share	$	2.21			$	3.00
Basic weighted average common shares outstanding		6,606				6,387
Diluted weighted average common shares outstanding		7,000				6,659

Unaudited Condensed Consolidated Balance Sheets
(In thousands, except per share data)

		March 31, 2025				December 31, 2024
ASSETS
Cash and cash equivalents		$	32,356			$	9,110
Restricted cash			116,737				123,392
Equipment held for operating lease, less accumulated depreciation			2,597,792				2,635,910
Maintenance rights			25,167				31,134
Equipment held for sale			19,125				12,269
Receivables, net			41,504				38,291
Spare parts inventory			67,318				72,150
Investments			65,210				62,670
Property, equipment & furnishings, less accumulated depreciation			54,342				48,061
Intangible assets, net			1,601				2,929
Notes receivable, net			179,283				183,629
Investments in sales-type leases, net			17,271				21,606
Other assets			56,927				56,045
Total assets		$	3,274,633			$	3,297,196
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued expenses		$	56,855			$	75,983
Deferred income taxes			191,297				185,049
Debt obligations			2,231,593				2,264,552
Maintenance reserves			104,452				97,817
Security deposits			24,090				23,424
Unearned revenue			37,666				37,911
Total liabilities			2,645,953				2,684,736
Redeemable preferred stock ($0.01 par value)			63,192				63,122
Shareholders’ equity:
Common stock ($0.01 par value)			74				72
Paid-in capital in excess of par			57,967				50,928
Retained earnings			505,083				491,439
Accumulated other comprehensive income, net of tax			2,364				6,899
Total shareholders’ equity			565,488				549,338
Total liabilities, redeemable preferred stock and shareholders’ equity		$	3,274,633			$	3,297,196

FAQ

What were WLFC's Q1 2025 revenue and earnings results?

WLFC reported record quarterly revenue of $157.7 million (up 32.5% YoY) and pre-tax income of $25.3 million in Q1 2025.

How much is Willis Lease Finance's quarterly dividend for Q2 2025?

WLFC declared a quarterly dividend of $0.25 per share, payable on May 22, 2025, to shareholders of record as of May 12, 2025.

What is WLFC's current portfolio utilization rate?

WLFC's portfolio utilization increased to 86.4% at the end of Q1 2025, up from 76.7% at year-end 2024.

How many engines and aircraft does Willis Lease Finance own?

As of March 31, 2025, WLFC's portfolio included 347 engines, 15 aircraft, one marine vessel, and other leased parts and equipment.

What was WLFC's maintenance reserve revenue in Q1 2025?

Maintenance reserve revenue was $54.9 million in Q1 2025, a 25% increase from $43.9 million in Q1 2024.