Willis Lease Finance (NASDAQ:WLFC) reported third-quarter 2026 revenue of $246.3 million, earnings before tax of $18.8 million and net income attributable to common shareholders of $10.2 million, or $0.47 per diluted share, as the aircraft and engine lessor expanded both its owned portfolio and managed assets.
Adjusted EBITDA reached $100.9 million during the quarter. Chief Executive Officer Austin Willis said the company continued to pursue growth through its balance sheet, services operations and Willis Aviation Capital asset-management platform.
“As we add assets to the balance sheet, it has a clear, direct, and positive impact to our earnings,” Willis said. The company’s assets under management rose 10% from the prior quarter to about $4.9 billion, compared with roughly $3.7 billion a year earlier. Its on-balance-sheet portfolio surpassed $3 billion for the first time.
Leasing revenue rises as portfolio expands
Chief Financial Officer Scott Flaherty said record lease-rent revenue of $84.4 million, up 10.2% year over year, helped drive quarterly results. The company attributed the increase to a 14.2% expansion in its balance-sheet portfolio from the third quarter of 2025, along with a modest improvement in average lease rates.
Average lease rates increased to 1.06% from 1.04% a year earlier, while average utilization declined to 83.2% from 86%. Willis said portfolio utilization averaged about 83% during the third quarter.
The company reported a record contribution margin of more than $25 million, up 18% from a year earlier. Willis defined the measure as lease-rent revenue and interest income less interest expense and depreciation and amortization on assets held for lease.
In August, the company acquired 12 commercial aircraft and 13 aircraft engines through the purchase of WNG aircraft and engine leasing entities. The transaction contributed to a 12% sequential increase in the company’s on-balance-sheet portfolio, management said.
Maintenance reserve revenue was $39.3 million, down from $76.1 million in the prior-year period. Flaherty said the decline primarily reflected lower long-term maintenance reserve revenue, which was $2.6 million in the quarter versus $29.5 million a year earlier. The company recognized long-term reserves on three engines during the quarter.
However, long-term maintenance reserve cash receipts increased 72% year to date to $27.8 million. Flaherty said newer-technology engines, which represented approximately 60% of the portfolio by dollar value, are generally leased under longer-term arrangements. Cash maintenance reserves are collected during those leases, though revenue typically is not recognized until lease expiration.
Asset management and equipment sales contribute
Willis Aviation Capital, or WAC, exceeded $1.5 billion in assets during the third quarter. The company said it has roughly $1 billion of additional capital available through its discretionary funds, in addition to capital raised through joint ventures and the broader WAC structure.
Willis said the company generally seeks to allocate new origination opportunities among its joint ventures, its Blackstone fund and its balance sheet. Management focused during the first half of 2026 on seeding the Blackstone and Liberty Mutual funds, including by transferring some company-held assets into those vehicles. With most seeding activity completed, Willis said new origination is expected to have a more direct impact on balance-sheet growth.
Management and advisory fees rose 140% to $4.5 million. Income from investments increased 41% to $7.3 million, primarily reflecting contributions from the Willis Mitsui joint venture and other asset-management businesses. Flaherty said year-to-date investment income and fund-management fees generated a 32% return on average balance-sheet investments.
Spare parts and equipment sales totaled $98.1 million, compared with $5.4 million in the year-earlier period. Equipment sales of $89.1 million largely reflected the sale of five aircraft acquired for the Willis Mitsui joint venture, plus two engines and one airframe. The trading profit on those equipment sales was $6.2 million, representing a 7% gross margin.
Gain on sale of lease equipment was $5.5 million, compared with $16.1 million a year earlier, following the sale of eight engines and other equipment. The company also recorded a $4.5 million equipment write-down related to the impairment of three engines.
Services expansion targets Asia and South Florida
Willis said it is expanding its maintenance, repair and storage footprint amid constrained industry maintenance capacity and longer shop visits. Maintenance services revenue increased 208.5% to $11.2 million, largely due to growth in engine and aircraft storage and repair services. The segment posted a negative gross margin of $1.7 million for the quarter.
During the quarter, the company purchased land for a new Willis Engine Repair Center in Malaysia. The site will be the company’s third WERC location and its first in Asia, joining facilities in Florida and the U.K. The Malaysia operation is intended to provide maintenance, repair and storage services for company-owned and third-party engines.
Willis also signed a purchase-and-sale agreement for a South Florida campus intended to consolidate the company’s headquarters, spare-parts business, U.S. maintenance operation and engine-storage activities. The company previously announced a long-term storage and lease-return agreement with Pratt & Whitney covering several engine platforms from facilities in Florida, the U.K. and Malaysia.
Management said aviation customers continue to show strong demand for engines and services despite elevated fuel prices, high interest rates and geopolitical risks. Willis said there has not been a meaningful increase in aircraft retirements, although some operators have discussed parking older, less fuel-efficient aircraft.
Capital actions and outlook
In September, Willis Lease Finance closed a $35 million Series B preferred stock placement with the Development Bank of Japan, bringing DBJ’s total Series B preferred investment to $100 million. The additional preferred investment carries an 8.09% dividend.
The board also expanded and extended its common-stock repurchase authorization to $200 million through Dec. 31, 2031. Management said it has no immediate plans to repurchase shares but wants flexibility to act if opportunities arise. The authorization does not apply to potential repurchases of the company’s convertible debt, Flaherty said.
Following the quarter, the board raised the recurring quarterly common dividend to $0.15 per share from $0.133 per share, a 12.8% increase. The dividend is payable Nov. 25 to shareholders of record on Nov. 16, 2026.
Net leverage, defined by the company as total debt obligations less cash and restricted cash divided by equity including preferred stock, was 2.88 times at quarter-end. Management said it has about $3 billion of deployable capital across its funding sources and expects to deploy fund capital within the funds’ two-year investment period, subject to market opportunities.
About Willis Lease Finance (NASDAQ:WLFC)
Willis Lease Finance Corporation is a commercial aircraft engine lessor and aviation services company headquartered in Coconut Creek, Florida. Founded in 1985, the company provides engines and related aviation assets to airlines, aircraft lessors, maintenance providers and other customers worldwide.
Its principal business is leasing spare and in-service commercial aircraft engines, including engines used for narrow-body and wide-body aircraft. Willis Lease Finance also provides engine portfolio management, maintenance and asset management services, and sells or leases aircraft engine parts and related equipment.
