Leases
The Company leases office locations, warehouse facilities and stores under various non-cancellable operating lease agreements. The Company’s leases have remaining lease terms of approximately 1 year to 10 years, which represent the non-cancellable periods of the leases and include extension options that the Company determined are reasonably certain to be exercised. The Company excludes from the lease terms any extension options that are not reasonably certain to be exercised, ranging from approximately 6 months to 3 years. Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as payments for common area maintenance and administrative services. The Company often receives customary incentives from landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases. Leases are classified as operating or financing at commencement. The Company does not have any material financing leases.
Operating lease right-of-use assets and liabilities on the consolidated balance sheets represent the present value of the remaining lease payments over the remaining lease terms. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, as the implicit rates in the leases are not readily determinable. Operating lease costs consist primarily of the fixed lease payments included in the operating lease liabilities and are recorded on a straight-line basis over the lease terms.
The Company’s operating lease costs were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease costs | $ | 19,069 | | $ | 12,845 | | $ | 10,005 |
| Variable lease costs | 1,970 | | 1,252 | | 944 |
| Short-term lease costs | 430 | | 488 | | 385 |
| Total lease costs | $ | 21,469 | | $ | 14,585 | | $ | 11,334 |
The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.
Supplemental cash flow information relating to the Company’s operating leases was as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for operating lease liabilities | $ | 14,013 | | $ | 11,367 | | $ | 8,421 |
| Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | 30,362 | | 38,534 | | 8,447 |
Other information relating to the Company’s operating leases was as follows:
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
Weighted-average remaining lease term | 6.6 years | | 6.7 years |
Weighted-average discount rate | 7.4% | | 6.9% |
As of December 31, 2025, the maturities of operating lease liabilities were as follows:
| | | | | |
| 2026 | $ | 18,167 |
| 2027 | 19,743 |
| 2028 | 19,249 |
| 2029 | 19,420 |
| 2030 | 16,785 |
Thereafter | 36,515 |
Total remaining lease payments | 129,879 |
Less: imputed interest | 29,159 |
Total operating lease liabilities | 100,720 |
Less: current portion | (13,052) |
Long-term operating lease liabilities | $ | 87,668 |
As of December 31, 2025, the Company had obligations under several lease agreements with expected commencement dates ranging from the first half of 2026 through early 2027 and terms of between ten and eleven years. The Company expects to classify these leases as operating leases and recognize lease obligations totaling $34.0 million over the terms of the leases.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.