Willis Lease(WLFC) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Results Performance Highlights Willis Lease Finance Corporation achieved record Q2 2025 results with significant revenue growth, record pre-tax income, and improved portfolio utilization | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $195.5 million | +29.4% | | Pre-Tax Income | $74.3 million | Record High | | Lease Rent Revenue | $72.3 million | +29.4% | | Maintenance Reserve Revenue | $50.7 million | -19.3% (YoY) | | Spare Parts & Equipment Sales | $30.4 million | +390.7% | - A significant one-time event was the sale of the company's aviation consultancy business to the Willis Mitsui & Company Engine Support Limited (WMES) joint venture, resulting in a $43.0 million gain[5][7] - Portfolio utilization increased significantly to 88.3% at the end of Q2 2025, compared to 76.7% at the end of 2024, indicating stronger demand for the company's leased assets[5] Operating Results Analysis Q2 2025 operating results show robust growth in core revenues, spare parts sales, and significant gains from asset and business divestitures Revenue Analysis Total revenue surged by 29.4% to $195.5 million in Q2 2025, driven by growth in core lease, maintenance, and spare parts sales | Revenue Stream | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $195.5M | $151.1M | +29.4% | | Core Lease & Maintenance Revenue | $123.0M | $118.8M | +4.0% | | Short-term Maintenance Revenue | $50.2M | $45.9M | +9.5% | | Spare Parts & Equipment Sales | $30.4M | $6.2M | +390.7% | - The growth in core lease and maintenance revenues was attributed to the continued strength of the aviation market, leading airlines to increasingly use the company's leasing and maintenance services[2] - The significant increase in spare parts and equipment sales was primarily due to the sale of one engine for $21.1 million and heightened demand for surplus materials as operators extend the life of their engine portfolios[4] Asset Sales and Portfolio Q2 2025 saw significant gains from asset sales, including $27.6 million from equipment and $43.0 million from the UK consultancy business divestiture - The company sold 14 engines, two airframes, and other equipment from its lease portfolio, resulting in a gain on sale of $27.6 million, a significant increase from the $14.4 million gain in Q2 2024[6] - The sale of Bridgend Asset Management Limited (BAML), the UK aviation consultancy business, to the WMES joint venture generated a gain of approximately $43.0 million[7] | Lease Portfolio Value | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Lease Portfolio | $2,830.0M | $2,872.3M | | Engines | 348 | 354 | | Aircraft | 15 | 16 | Financial Statements Unaudited Q2 2025 financial statements show substantial growth in net income, diluted EPS, and total assets, primarily funded by increased debt Unaudited Condensed Consolidated Statements of Income Q2 2025 income statements show total revenue of $195.5 million (+29.4%), record pre-tax income, and 41.5% growth in net income to $59.0 million | Income Statement (Q2) | 2025 (in thousands) | 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $195,502 | $151,120 | 29.4% | | Total Expenses | $167,237 | $97,042 | 72.3% | | Gain on sale of business | $42,950 | $0 | nm | | Income before income taxes | $74,297 | $57,903 | 28.3% | | Net income attributable to common shareholders | $58,955 | $41,664 | 41.5% | | Diluted EPS | $8.43 | $6.21 | 35.8% | Unaudited Condensed Consolidated Balance Sheets Total assets reached $3.95 billion as of June 30, 2025, driven by increased debt and restricted cash, with shareholders' equity growing to $617.9 million | Balance Sheet (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $37,267 | $9,110 | | Restricted cash | $745,268 | $123,392 | | Equipment held for operating lease | $2,606,593 | $2,635,910 | | Total Assets | $3,946,445 | $3,297,196 | | Liabilities & Equity | | | | Debt obligations | $2,800,643 | $2,264,552 | | Total Liabilities | $3,265,247 | $2,684,736 | | Total Shareholders' Equity | $617,937 | $549,338 | Corporate Information Willis Lease Finance Corporation specializes in aircraft engine leasing and services, with a conference call scheduled to discuss Q2 2025 results and forward-looking statements - The company's core business involves leasing large and regional spare commercial aircraft engines, APUs, and aircraft to a global client base of airlines, manufacturers, and MRO providers[11] - A conference call with executive management to discuss the Q2 2025 results was scheduled for 10:00 a.m. Eastern Time on August 5, 2025[9][10] - The press release contains forward-looking statements and advises readers not to place undue reliance on them, highlighting various risks and uncertainties that could affect actual results, such as industry trends, economic events, and regulatory changes[12]