Willis Lease Finance 2025 Q1 Earnings Misses Targets as Net Income Declines 19.2%

Willis Lease Finance (WLFC) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company's financial results fell short of expectations, with a significant decline in net income. Willis Lease Finance's guidance remains unchanged, with expectations for continued growth driven by strong demand in the aviation marketplace. The company is focusing on sustainable aviation fuel initiatives to enhance long-term growth.

Revenue

Willis Lease Finance's total revenue for the first quarter of 2025 rose by 32.9% year-over-year, reaching $155.17 million, compared to $116.74 million in 2024 Q1. Lease rent revenue amounted to $67.74 million, while maintenance reserve revenue was $54.86 million. Spare parts and equipment sales contributed $18.24 million, and interest revenue totaled $3.93 million. Gains from the sale of leased equipment and financial assets were $4.44 million and $378,000 respectively. Maintenance services revenue reached $5.59 million, with other revenue at $2.56 million.

Earnings/Net Income

Willis Lease Finance's EPS declined by 25.0% to $2.34 in Q1 2025, compared to $3.12 in Q1 2024. The net income decreased by 19.2% to $16.87 million, down from $20.87 million a year ago, indicating challenging earnings performance.

Price Action

The stock price of Willis Lease Finance climbed 5.20% during the latest trading day but fell 12.78% over the most recent full trading week and 11.52% month-to-date.

Post-Earnings Price Action Review

Investors employing a strategy of buying WLFC shares after a quarter of revenue decline and holding for 30 days have historically seen moderate returns over the past five years. This approach has yielded an average return of 46.61%, compared to a benchmark return of 83.12%. The strategy's compound annual growth rate (CAGR) was 8.05%, with a maximum drawdown of -23.76% and a Sharpe ratio of 0.37, highlighting both moderate returns and risk. This indicates that while the strategy has provided positive returns, it has also been subject to significant volatility, reflecting the inherent risks associated with the aviation leasing industry.

CEO Commentary

"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. He noted that while concerns over tariffs have created market volatility, the company remains confident in its business drivers. The rising cost of new engines continues to push operators towards leasing, and WLFC's maintenance capabilities offer value and certainty for cost-conscious airlines.

Guidance

The company anticipates continued growth in core lease and maintenance revenues, driven by the robust aviation marketplace. WLFC expects that the demand for leasing will remain strong as operators seek to manage costs effectively. The focus on sustainable aviation fuel initiatives is expected to contribute positively to long-term growth and operational efficiency.

Additional News

In recent weeks, Willis Lease Finance Corporation has been active in strategic developments and corporate actions. On April 29, 2025, the company closed three additional Japanese Operating Lease with Call Option (JOLCO) deals, bringing total JOLCO financings to nearly $120 million. On April 23, 2025, Willis Aviation Services Limited announced the construction of an additional two-bay narrowbody hangar at its Teesside facility, enhancing its maintenance capabilities. Furthermore, on March 19, 2025, WLFC entered a joint venture with Global Engine Maintenance to develop a new engine test cell facility, aiming to strengthen its position in the engine repair and maintenance market.