0001018164-26-000036
SEC filingRevenue grew 28% driven by lease rent and spare parts sales; net income rose marginally due to higher expenses.
Willis Lease Finance Corporation (WLFC) is a leading lessor and servicer of commercial aircraft and aircraft engines. The company's principal business objective is to build shareholder value by acquiring and managing commercial aircraft and engines to generate returns through lease rent, maintenance reserve revenues, and management fees for third-party assets. As of December 31, 2025, WLFC held $2,801.7 million in operating lease equipment, $139.9 million in notes receivable, $30.6 million in maintenance rights, and $16.6 million in sales-type lease investments, representing 363 engines, 20 aircraft, one marine vessel, and other leased parts and equipment with 69 lessees across 37 countries. Additionally, the company managed 116 engines and related equipment for third parties.
WLFC operates through two reportable segments. The Leasing and Related Operations segment focuses on leasing aircraft and engines and providing related services to a diversified group of commercial aircraft operators and MROs worldwide. This segment generated 94.9% of total consolidated revenue in 2025. The Spare Parts Sales segment, conducted through wholly-owned subsidiary Willis Aero, engages in the sale of aircraft engine parts and materials acquired from third parties or the leasing portfolio, offering end-of-life solutions and managing the full life cycle of lease assets.
The company's engine portfolio primarily consists of noise-compliant Stage IV commercial jet engines manufactured by CFMI, General Electric, Pratt & Whitney, Rolls Royce, and International Aero Engines. These engines power Airbus, Boeing, Bombardier, and Embraer aircraft. The aircraft leasing portfolio includes six ATR 72-500, six Dash 8-400, and various Airbus A319 and A320 models. Additionally, WLFC offers related services such as engine storage, Part 145 maintenance, and aircraft tear-down services.
WLFC leases engines and aircraft directly to commercial aircraft operators and MROs. Spare parts are sold through Willis Aero. The company also participates in joint ventures: WMES (with Mitsui & Co.), CASC Willis (with China Aviation Supplies Import & Export Corporation), and WGET (with Global Engine Maintenance). Approximately 64.8% of on-lease equipment by net book value is leased internationally, with lessees in 37 countries across eight geographic regions. Leases are predominantly denominated in USD. The company believes the loss of any single customer would not have a significant long-term adverse effect on its business.
The market for aircraft engine leasing and spare parts sales is highly competitive. Competitors include aircraft engine and parts manufacturers, aircraft and engine lessors, airline service and repair companies, and spare parts distributors. Many competitors have substantially greater resources, including greater name recognition, larger product lines, and complementary lines of business. Equipment manufacturers, aircraft maintenance providers, and other after-market suppliers may vertically integrate into the markets WLFC serves, potentially increasing competition. WLFC differentiates itself through the quality of its portfolio, supply reliability, high customer service, and an engine pooling arrangement that allows quick access to spare engines.
WLFC's strategy centers on acquiring and managing commercial aircraft and engines to provide returns through leasing and maintenance reserves. The spare parts business enables end-of-life solutions and full life-cycle management of lease assets. The company expands through joint ventures to tap into growing markets like China and new capabilities like engine testing. A robust risk management program addresses credit, interest rate, insurance, and political risks. The company focuses on maintaining a high-quality portfolio, ensuring engine availability in high-demand locations, building customer relationships, and offering flexible lease terms (40% of leases by net book value are short-term as of 2025).
As of December 31, 2025, WLFC employed 475 individuals worldwide (467 full-time), including consultants. Employees work in sales, marketing, technical service, and administrative roles across North America, the United Kingdom, Europe, India, and Asia. None of the employees are covered by a collective bargaining agreement. The company emphasizes talent attraction and retention, leadership development, culture and engagement through annual surveys, performance management, and a total rewards program including health and wellness benefits and annual incentive compensation.
For the year ended December 31, 2025, total revenue increased 28.3% to $730.2 million from $569.2 million in 2024. The growth was driven by a 22.4% increase in lease rent revenue ($291.6M vs $238.2M) due to a larger lease portfolio and improved utilization (85% vs 83%). Maintenance reserve revenue rose 8.4% to $232.0M, supported by more engines on short-term leases and higher usage rates. Spare parts and equipment sales more than tripled to $95.5M, reflecting strong demand for surplus material and the sale of four engines (vs one in 2024). Gain on sale of leased equipment increased 19.9% to $54.0M on higher sales volume.
Net income attributable to common shareholders grew 3.5% to $108.1M from $104.4M, despite a significant increase in operating expenses. Depreciation and amortization rose 20.7% to $111.6M due to portfolio growth. General and administrative expenses surged 32.7% to $194.7M, driven by higher personnel costs (including $15.3M in share-based compensation) and consulting fees. Write-down of equipment increased to $32.9M from $11.2M, reflecting impairment of 28 engines. Net finance costs rose 29.0% to $135.1M due to higher debt levels. These headwinds were partially offset by a $43.0M gain on the sale of the BAML business to joint venture WMES. Adjusted EBITDA increased 16.6% to $459.1M.
The company does not report segment information; however, revenue lines show key trends. The core leasing business (lease rent and maintenance reserve) contributed 71.7% of total revenue, growing 15.5% combined. Spare parts and equipment sales became a more significant contributor at 13.1% of revenue vs 4.8% in 2024. Gain on sale of equipment provided 7.4% of revenue. Other revenue, primarily management fees from WMES, grew 89.0% to $17.2M. The shift toward higher-margin spare parts sales and asset sales improved revenue diversification.
Management expects continued growth through portfolio expansion and strategic initiatives. The company increased its revolving credit facility to $1.0B and closed $596.0M in WEST VIII notes and $392.9M in WEST IX notes to fund acquisitions. Purchase commitments include 46 new LEAP engines ($857.4M) and six PW1133 engines ($104M) through 2030. The company anticipates that internally generated funds and existing facilities will support operations through 2026. However, exposure to variable-rate debt ($732.7M) and potential increases in borrowing costs could pressure earnings. The company ceased investment in a sustainable aviation fuel project and is pursuing strategic alternatives, indicating a focus on core leasing operations.
As of December 31, 2025, Willis Lease Finance Corporation reported total assets of $3,936.3 million, including cash and cash equivalents of $16.4 million and restricted cash of $530.5 million (primarily held within consolidated VIEs). Shareholders' equity stood at $662.1 million, while total debt obligations were $2,700.3 million (net of unamortized issuance costs). The company's liquidity position is supported by $1.0 billion revolving credit facility (with $350.0 million available) and a $500.0 million warehouse facility ($417.3 million available). Inventory, consisting of spare parts, was $56.6 million, and unearned revenue (deferred maintenance reserves) was $35.4 million.
The notes disclose $36.3 million in prepaid deposits for equipment purchase commitments, recorded in Other assets. These represent advance payments for future engine acquisitions. Additionally, the company has significant debt repayment obligations: $109.7 million due in 2026, $213.5 million in 2027, $261.6 million in 2028, $1,091.3 million in 2029, and $115.1 million in 2030, with $940.9 million thereafter. Lease-related commitments include future minimum lease payments under non-cancelable operating leases of $525.9 million and notes receivable/ sales-type lease payments of $208.6 million (undiscounted).
During 2025, the company deployed capital through multiple channels. It repurchased 30,000 common shares for $3.8 million and paid common dividends of $8.7 million ($1.15 per share) and preferred dividends of $5.4 million. Debt activity was substantial: $1,660.9 million in new borrowings (including $596.0 million via WEST VIII and $392.9 million via WEST IX ABS notes) and $1,221.5 million in repayments, resulting in a net debt increase of $439.4 million. Capital expenditures for equipment (held for operating lease and sale) totaled $524.6 million, plus $31.1 million for property and equipment, for total capex of $555.7 million (76.1% of revenue). The company also contributed $31.7 million to joint ventures.
The notes do not provide segment-level operating income. Revenue is disaggregated by geography: United States $205.9M, Europe $183.7M, India $137.8M, Asia-Pacific $110.9M, Canada $41.7M, South America $37.2M, Central America $7.7M, Africa $4.6M, and Middle East $0.9M. Lease rent revenue (the primary revenue source) was $291.6 million, with the largest lessee concentrations: one customer accounted for 13% of lease rent in 2025, and one customer for 15% of receivables at year-end.
The provided document excerpt does not contain the actual Consolidated Statements of Cash Flows for Willis Lease Finance Corporation. The text references that the statements appear on page 57 of the filing, but the numbers are not included in the excerpt. Without access to the specific cash flow line items (such as net cash provided by operating activities, capital expenditures, dividends, or share repurchases), no analysis of cash flow quality, CFO versus net income, capex intensity, or free cash flow coverage can be performed. The only financial data available are from the impairment note: equipment held for operating lease of $2.8 billion, notes receivable of $139.9 million, and investments in sales-type leases of $16.6 million, as well as an impairment charge of $8.9 million. However, these are not cash flow statement figures.
Note: This analysis is limited by the absence of the cash flow statement in the provided text. To complete the cash flow analysis, the full 10-K filing, specifically the Consolidated Statements of Cash Flows, is required.