Leases
Operating leases for our corporate offices have remaining lease terms ranging from 1.6 years to 7.1 years, some of which include options to extend the leases for up to ten years. These options to extend have not been recognized as part of our operating lease ROU assets and lease liabilities as it is not reasonably certain that we will exercise these options. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. Certain leases contain provisions for property-related costs that are variable in nature for which we are responsible, including common area maintenance, which are expensed as incurred.
The components of lease expense recognized in the Consolidated Statements of Operations were as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 4,070 | | | $ | 4,188 | | | $ | 4,362 | |
| Variable lease cost | 1,370 | | | 1,479 | | | 1,737 | |
| Total lease cost | $ | 5,440 | | | $ | 5,667 | | | $ | 6,099 | |
Lease-related assets and liabilities were as follows (in thousands, except years and %):
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Assets | | | |
| | | |
| Operating lease right-of-use assets | 15,924 | | | 17,472 | |
| | | |
| Liabilities | | | |
| Other current liabilities | $ | 4,873 | | | $ | 4,273 | |
| Operating lease liabilities | 33,287 | | | 37,476 | |
| Total lease liabilities | $ | 38,160 | | | $ | 41,749 | |
| | | |
| Weighted-average remaining lease term (years) | 6.3 | | 7.4 |
| Weighted-average discount rate | 5.2 | % | | 5.1 | % |
In January 2023, we entered into an amendment to the lease agreement for our San Diego facility (the "San Diego Lease"). We remeasured the lease liability and recorded a reduction to the lease liability and ROU asset using the discount rate at the modification date, which resulted in a gain of $2.4 million in the Consolidated Statements of Operations.
In June 2023, we entered into a second amendment to reduce the rentable square footage and our future rental payment obligations under the San Diego Lease pursuant to which we made a one-time payment of $2.9 million. We again remeasured the lease liability and recorded a reduction to the lease liability using the discount rate at the modification date. As a result, we recorded a gain of $1.9 million in the Consolidated Statements of Operations.
In July 2023, we entered into an agreement to sublet one of our office spaces in Santa Barbara through December 31, 2031 (the "Santa Barbara 90 Sublease"). The total rental commitment over the term of the Santa Barbara 90 Sublease is $6.1 million. We performed impairment testing in accordance with ASC 360, and no impairment related to the ROU assets was recorded for the year ended December 31, 2023.
Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows (in thousands):
| | | | | |
| Years ending December 31, | |
| 2026 | $ | 6,662 | |
| 2027 | 6,844 | |
| 2028 | 6,962 | |
| 2029 | 6,910 | |
| 2030 | 7,110 | |
| Thereafter | 10,353 | |
| Total future minimum lease payments | 44,841 | |
| Less: imputed interest | (6,681) | |
| Total | $ | 38,160 | |