Willis Lease Finance (NASDAQ:WLFC) reported record results for both the fourth quarter and full year 2025, pointing to strong demand for leased engines, spare parts, and maintenance services amid an aviation market that management described as increasingly “engine-centric.”
On the company’s fourth-quarter earnings call, CEO Austin Willis said fourth-quarter revenue rose 27% year over year to a record $193.6 million. For the full year, revenue increased 28% to a record $730.2 million, while earnings before tax (EBT) reached a record $160.6 million. CFO Scott Flaherty added that adjusted EBITDA—a metric the company highlighted to reflect normalized cash-flow generation—totaled $459.1 million in 2025, up 16.6% from the prior year.
Portfolio utilization and shareholder returns
Willis also emphasized capital returns, noting the company recently declared a recurring dividend of $0.40 per share. Flaherty said the company returned $8.7 million to shareholders through common dividends during 2025 and paid its sixth consecutive quarterly dividend in November at the increased $0.40 rate. He added the company declared and paid a seventh consecutive regular quarterly dividend in February after year-end, also at $0.40 per share.
Demand backdrop: grounded aircraft and long runway for shop visits
Willis said the aviation market remains constrained by engine availability, citing more than 600 aircraft powered by GTF engines still grounded and “new technical issues” around LEAP engines that could lead to additional maintenance. While management acknowledged optimism that aircraft-on-ground conditions could improve as repair delays ease, the company said the long-term outlook for engine shop visits remains strong through the mid-2030s.
Willis expects shop visits to taper for CFM56 and V2500 engines over time, but said this will be “more than replaced” by shop visits for GTF and LEAP engines—engine types that represent a growing portion of Willis’s portfolio. Management added it believes these newer engines will require more frequent and more expensive shop visits than prior generations even after early technical issues are resolved.
Willis Aviation Capital and new funds with Liberty Mutual and Blackstone
A central strategic theme on the call was the company’s newly announced asset manager, Willis Aviation Capital, which management described as consisting of discretionary fund management, management of joint ventures, and management of engines and aircraft for investors where Willis has no equity interest.
Willis said it is prepared to begin deploying capital into two “funds of one”:
- Liberty Mutual Insurance partnership: A $600 million fund in which Willis is a minority investor and general partner, designed to finance aircraft engines with what management called attractive interest rates and advance rates. Willis said the structure builds on loan-like products it has offered on its balance sheet.
- Blackstone Credit & Insurance partnership: A separate fund of more than $1 billion to invest in engines and aircraft similarly to Willis’s proprietary investments, with Willis again serving as a minority investor and general partner.
Management said it expects to deploy capital alongside joint ventures and the company’s own balance sheet and later establish follow-on funds with additional limited partners. Willis said the company will earn servicing fees and carried interest (promote) based on fund performance, and it highlighted 2025 fee-related revenue of $17.2 million included in “other revenue.”
In response to analyst questions, management said it intends to seed both funds with a small portfolio, but expects the “lion’s share” of assets to be originated in the marketplace. The company declined to provide specific amounts or the percentage of its portfolio that could be transferred into the funds. Flaherty said that, based on the company’s view of market values relative to book values, Willis would expect gains on movements of assets into those vehicles, consistent with prior asset sales.
When asked about sourcing advantages, Willis cited relationships with OEMs and an order book with CFMI for LEAP engines, purchases from other leasing companies where Willis believes it can add value on the “power plant side,” and program-based originations where Willis said it can add value beyond acquisition price by helping defer long-term maintenance.
Services businesses and operational milestones
Willis emphasized the role of its services platform, noting that nearly 300 of the company’s roughly 475 employees are in services businesses. It highlighted internal demand across the platform: in the fourth quarter, 57% of WASI’s parts sales were intercompany sales supporting the company’s two MROs, while WERC US and WERC UK generated 15% and 31% of revenue, respectively, from intercompany activity.
Willis said WERC US completed its first core module performance restoration, replacing both LLPs and airfoils, and reported the engine tested at approximately 51.7 degrees of EGT margin at high thrust. Management characterized the milestone as a step toward becoming a more comprehensive maintenance provider.
The company also referenced a “novel materials agreement” with CFM, saying it worked with CFM throughout 2025 on a structure intended to facilitate repairs of CFM56 engines and drive additional business for its MROs.
In the U.K., Willis said its airframe maintenance facility (WASL) is fully operational and certified to perform all C checks on 737 NG aircraft and up to six Y checks on A320ceo aircraft. The company said it performed 12 maintenance checks in 2025 and has “good line of sight” on business for the next 12 months.
Financial details: revenue mix, impairments, financing, and portfolio value
Flaherty detailed revenue drivers, including core lease rent revenue of $291.6 million and interest revenue of $14.1 million, reflecting a $3.0 billion total portfolio at year-end. He said the company purchased $524.6 million of equipment in 2025, including capitalized shop visit costs, partially offset by $215.6 million of equipment book value sales, $106.3 million of depreciation, $41.5 million transferred to held-for-sale, and $32.9 million of impairment write-downs.
Maintenance reserve revenue totaled $232.0 million, up 8.4% year over year. Long-term maintenance reserves associated with engines coming off long-term lease were $44.5 million, while short-term maintenance reserves were $187.5 million. Management noted long-term maintenance revenue is lumpy, and in Q&A discussed quarter-to-quarter variability.
Spare parts and equipment sales to third parties rose to $95.5 million from $27.1 million, driven by $37.7 million of spare parts sales and $57.8 million of equipment sales, primarily to joint venture partner Willis Mitsui. Gain on sale of lease equipment—a net revenue metric—was $54.0 million in 2025 on $269.7 million of gross equipment sales.
On expenses, G&A rose to $194.7 million from $146.8 million, with increased personnel costs—including higher share-based compensation—consultant fees primarily tied to the sustainable aviation fuel project, and higher legal fees related to finance initiatives and fund partnerships. The company said it elected to stop pursuing its sustainable aviation fuel project, describing the decision as difficult and tied to its assessment of competitive positioning.
Net finance costs increased to $135.1 million as total debt obligations rose to $2.7 billion at year-end 2025 from $2.264 billion at year-end 2024. Flaherty cited interest expense associated with a warehouse facility, the West Eight notes that closed in June 2025, and lower derivative receipts as swaps matured, partly offset by higher interest income on restricted cash and savings from paid-down ABS notes.
The company recorded a $43.0 million gain on the sale of its wholly owned subsidiary Bridgend Asset Management Limited (BAML) to Willis Mitsui for $45.0 million, and said it recognized $13.4 million in earnings from 50%-owned joint ventures, up from $8.2 million in 2024. Net income attributable to common shareholders was $108.1 million, up from $104.4 million, with diluted EPS of $15.39 compared to $15.34.
Flaherty also discussed portfolio valuation, saying the company’s annual appraisal process indicated maintenance-adjusted market value in excess of book value by approximately $700 million, excluding potential future end-of-lease payments and other contractual return conditions. In Q&A, management confirmed that figure does not include any value tied to the company’s order book.
On leverage, Flaherty said leverage declined to 2.97 times at year-end 2025 from 3.48 times at year-end 2024, providing flexibility for opportunistic investments. Management also noted it continues to have insurance claims related to Russia and said it could not provide details, but referenced confidence based on recent judgments in Europe and the U.S.
In closing remarks, management said it views 2025 as a year of strong performance and groundwork-laying for long-term strategy, with Willis Aviation Capital intended to accelerate growth in assets under management and services businesses.
About Willis Lease Finance (NASDAQ:WLFC)
Willis Lease Finance Corporation (NASDAQ: WLFC) is an independent global provider of aircraft engine leasing, trading and aftermarket services. Founded in 1991 and headquartered in the United States, the company specializes in offering short- and long-term operating leases for jet engines and auxiliary power units. Through its broad engine portfolio, Willis Lease Finance supports a wide range of commercial aircraft across various operators, including major airlines, regional carriers and other leasing companies.
In addition to leasing solutions, Willis Lease Finance offers comprehensive engine trading and asset management services.
