Willis Lease Finance Corporation Q3 FY2025 earnings call

· WLSC continued strong financial performance in Q3 with revenue up 25.4% y-o-y. Purchased 16 engines and 6 aircraft for lease portfolio totaling ~$136.4 million. · Declared seventh consecutive quarterly dividend, increasing to $0.40 per share. · Strong demand for engines with 86% average third-quarter utilization and lease rental factor over 1%. Engine shops near capacity, addressing testing capability via engine test cell development in Florida. · Opened new aircraft maintenance hangar in Teesside, fully booked through winter. · Welcomed Pascal Picano as Senior Vice President of Aircraft Leasing and Trading.

In the third quarter, Willis Lease Finance Corporation (WLSC) achieved quarterly revenue of $183.4 million, a 25.4% year-over-year increase. Leasing, maintenance reserve, and interest revenue totaled $156 million, a 32% increase from the same quarter in 2024. Engine average third-quarter utilization was approximately 86% and lease rental factor over 1%. Maintenance reserve revenues were $76.1 million, up 52.8% from the prior comparable period. Spare parts and equipment sales were $5.4 million in Q3 compared to $10.9 million in the prior comparable period. Gain on sale of lease equipment was $16.1 million, up 69.5% from the comparable period.

· Declared seventh consecutive quarterly dividend, increasing to $0.40 per share. · Believes well-positioned to fulfill customers' increasing needs for lease engines and own growth, seeing good opportunities to deploy capital.

· Engine testing capability is the biggest limiting factor for engine shop capacity. · Fluctuations in spare parts sales. · Tax factors may affect the actual tax rate.

Q: Louis Raffetto asked about how improving new aircraft delivery rates may impact legacy engine values and Willis' services offerings.

A: Austin Willis responded that improving delivery rates may add supply, hasten retirement of current gen aircraft (potentially downward pressure on values), and play well into services and programs like ConstantThrust, with over 53-54% of portfolio in future gen equipment.

Q: William Waller asked about reconciling the difference between common equity increase and reported earnings for common shareholders.

A: Scott Flaherty explained it involves net income, paid-in capital components like stock-based compensation expense, etc.

Q: William Waller asked about G&A expense and compensation component.

A: Scott Flaherty walked through incentive compensation, share-based compensation, etc.

Q: William Waller asked about income tax expense and Section 162 compensation treatment.

A: Scott Flaherty explained higher tax rate was affected by 162(m) and tax law changes like the One Big Beautiful Bill.

Q: William Waller asked about share repurchases.

A: Scott Flaherty said they're always looking at ways to maximize shareholder value and consider share repurchases in the future.

Q: Eric Gregg asked about multimillion dollar write-downs.

A: Austin Willis said write-downs related to engines coming off lease and moving to held-for-sale, Scott Flaherty added about engine utilization and end-of-lease treatments.

Q: Eric Gregg asked about aircraft leasing plan and SAF project funding.

A: Austin Willis said planning to grow aircraft leasing by adding value, and on SAF, intent to fund with third parties, with stage gates in place.