Willis Lease Finance Reports Record Q1 2025 Earnings

Willis Lease Finance ((WLFC)) has held its Q1 earnings call. Read on for the main highlights of the call.

The latest earnings call from Willis Lease Finance Corporation (WLFC) showcased a robust start to 2025, marked by record revenues and strategic advancements. Despite facing challenges such as increased general and administrative (G&A) expenses and higher finance costs, the overall sentiment remained positive, driven by improved utilization rates and significant growth.

Strong Revenue and Growth

Willis Lease Finance reported record quarterly revenues of $157.7 million, representing a 33% increase from the same quarter in 2024. This impressive growth was primarily driven by core lease rent revenue and maintenance reserve revenues, underscoring the company’s strong market position.

Improved Utilization Rate

The company achieved a notable improvement in its portfolio utilization rate, which rose from 76.7% at the end of 2024 to 86.4% by the close of the first quarter of 2025. This increase reflects enhanced operational efficiency and asset management.

Significant Spare Parts Sales Increase

Sales of spare parts and equipment to third parties surged by an impressive 455%, reaching $18.2 million in Q1 2025 compared to $3.3 million in the same period last year. This growth highlights the company’s successful expansion in this segment.

Successful Strategic Transactions

WLFC announced several strategic transactions, including the purchase of 30 additional LEAP engines and a new ConstantThrust deal with Air India Express. Additionally, the company entered into a joint venture to develop an engine test facility, further strengthening its strategic capabilities.

Increased G&A Expenses

General and administrative expenses rose to $47.7 million in Q1 2025, up from $29.6 million in the previous year. This increase was largely attributed to consultant-related fees for a sustainable aviation fuel project and share-based compensation.

Higher Finance Costs

Net finance costs increased to $32.1 million in Q1 2025, compared to $23.0 million in the same period in 2024. This rise was due to increased indebtedness and a higher average cost of debt, posing a challenge for the company.

Reduced Gain on Sale of Leased Equipment

The gain on the sale of leased equipment decreased to $4.8 million in Q1 2025, down from $9.2 million in the comparable quarter. This reduction indicates a shift in the company’s asset management strategy.

Forward-Looking Guidance

Looking ahead, Willis Lease Finance remains optimistic about its growth trajectory. The company reported a pre-tax income of $25.2 million and maintained a strong average utilization rate of 79.9%, ending at 86.4%. WLFC continues to pay dividends, reflecting confidence in its financial stability. The strategic purchase of LEAP engines and the development of an engine test facility are expected to drive future growth, despite broader macroeconomic concerns.

In summary, the earnings call from Willis Lease Finance Corporation highlighted a strong start to 2025, with record revenues and strategic initiatives paving the way for future growth. While challenges such as increased expenses and finance costs exist, the overall sentiment remains positive, supported by improved utilization rates and significant sales growth.