Leases
The Company has operating leases in various locations. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms for all leases.
On December 16, 2024, the Company entered into a lease agreement with a lessor to lease approximately 154,231 square feet of office space for its new headquarters located in San Jose, California. The lease has a term of approximately 7.5 years and commenced in June 2025. The Company has the option to extend the lease for up to two consecutive terms of 60 months each, subject to the terms therein. The option to renew the term was not included for purposes of determining the ROU and associated lease liabilities as the Company determined that the renewal of the lease is not reasonably certain to be exercised as of the lease commencement date.
Supplemental balance sheet information related to the Company’s operating leases is as follows (in thousands):
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Assets | | | |
| Operating lease ROU assets, net | $ | 22,810 | | | $ | 2,983 | |
| Liabilities | | | |
| Operating lease liabilities, current | $ | 4,146 | | | $ | 1,286 | |
| Operating lease liabilities, noncurrent | 26,828 | | | 1,788 | |
| Total lease liabilities | $ | 30,974 | | | $ | 3,074 | |
Operating lease ROU assets, net are included in other assets; operating lease liabilities, current are included in accrued expenses and other current liabilities; and operating lease liabilities, non-current are included in other liabilities, on the consolidated balance sheets.
The components of lease expense, included in operating expenses, were as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease expense | $ | 5,879 | | | $ | 2,633 | | | $ | 1,640 | |
| Short-term lease expense | 368 | | | 229 | | | 200 | |
| Variable lease expense | 1,608 | | | 284 | | | 310 | |
| Total lease expense | $ | 7,855 | | | $ | 3,146 | | | $ | 2,150 | |
The weighted-average remaining lease term and discount rates were as follows:
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Weighted average remaining lease term (in years) | 6.4 | | 3.2 |
| Weighted average discount rate | 7.1 | % | | 11.1 | % |
The future minimum operating lease payments for each of the next five years and thereafter are as follows as of December 31, 2025 (in thousands):
| | | | | |
| Years ending December 31 | Operating Leases |
| 2026 | $ | 6,153 | |
| 2027 | 6,466 | |
| 2028 | 6,268 | |
| 2029 | 5,798 | |
| 2030 | 2,808 | |
| Thereafter | 10,924 | |
Total future minimum lease payments | 38,417 | |
| Less: Imputed interest | (7,443) | |
| Total operating lease liabilities | $ | 30,974 | |
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.