Willis Lease Finance Achieves Record Growth in 2024

Willis Lease Finance ((WLFC)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Willis Lease Finance Corporation painted a picture of robust financial health and strategic growth. The company reported record revenues and growth, driven by its core leasing business and innovative financing strategies. However, the call also acknowledged challenges such as increased net finance costs, higher general and administrative expenses, and equipment write-downs.

Record-Breaking Revenue and Growth

2024 marked a milestone year for Willis Lease Finance Corporation, achieving its strongest financial performance since becoming a publicly traded entity. The company reported total revenues of $569.2 million and a pre-tax income of $152.6 million, reflecting a significant 127% increase in earnings before tax compared to the previous year.

Strong Performance of Core Leasing Business

The core leasing business of Willis Lease Finance saw impressive growth, with the total portfolio size reaching $2.87 billion by the end of 2024. The business generated core lease rent revenues of $238.2 million and interest revenues of $11.7 million, underscoring its vital role in the company’s financial success.

Successful Capital Deployment

In 2024, Willis Lease Finance strategically acquired nearly $1 billion in engines and aircraft. This investment was split between 35% current technology assets and 65% future technology assets, positioning the company for continued growth and adaptation to industry advancements.

Innovative Financing and Capital Structure

The company made strides in financing innovation, completing its third JOLCO financing and the industry’s first-ever engine warehouse financing for $500 million. Additionally, Willis Lease expanded its credit facility to a new five-year $1 billion revolving credit facility, enhancing its financial flexibility.

Dividend Payments and Shareholder Returns

Willis Lease Finance demonstrated its commitment to shareholder returns by paying a third consecutive quarterly dividend of $0.25 per share in February 2025. The company also issued a one-time special dividend of $1 per share in the second quarter of 2024, rewarding shareholders for their continued support.

New Constant Thrust Deal

The company signed a new constant thrust deal for over 20 CFM56-7B engines, providing significant savings for the customer and deploying a meaningful amount of capital. This deal highlights Willis Lease’s strategic approach to customer satisfaction and capital utilization.

Increased Net Finance Costs

Net finance costs rose to $104.8 million in 2024 from $78.8 million in 2023, attributed to increased indebtedness and a rise in the weighted average cost of debt. This increase reflects the company’s strategic investments and financing activities.

Higher General and Administrative Expenses

General and administrative expenses increased to $146.8 million in 2024 from $115.7 million in 2023. This rise was driven by personnel costs, including share-based compensation and one-time payments to executives, reflecting the company’s investment in talent and leadership.

Write-Down of Equipment

The write-down of equipment totaled $11.2 million for 2024, with $10.4 million occurring in the fourth quarter. This was largely due to annual impairment reviews, highlighting the company’s commitment to maintaining an accurate valuation of its assets.

Forward-Looking Guidance

Looking ahead, Willis Lease Finance Corporation provided a robust financial outlook. The company reported a record return on equity of 21% for the year, with significant capital returns to shareholders, including a consistent quarterly dividend. The acquisition of nearly $1 billion in engines and aircraft, focusing on modernizing their portfolio, underscores their strategic growth plans. Management emphasized maintaining a balance between shareholder returns and achieving growth and leverage targets, supported by strategic financings and an expanded credit facility.

In conclusion, the earnings call for Willis Lease Finance Corporation highlighted a year of record-breaking achievements and strategic growth initiatives. While challenges such as increased finance costs and administrative expenses were noted, the company’s innovative financing strategies and commitment to shareholder returns paint a positive outlook for the future.