Leases
The Company primarily enters into leases for office space that are classified as operating leases. Most leases are not cancelable prior to their expiration.
The Company terminated one of its operating leases for office space and modified another during the third quarter of 2023 that increased its lease payments by $0.2 million. The Company recognized a total decrease of $4.2 million to operating lease assets, $0.7 million to the current portion of operating lease liabilities included in accrued expenses and other current liabilities, and $4.7 million to the non-current portion of operating lease liabilities on the consolidated balance sheets for the lease termination and lease modification. As part of the lease termination, the Company agreed to forfeit a $0.9 million security deposit included in other non-current assets on the consolidated balance sheets. The Company recognized a $0.2 million gain on lease termination within operating expenses on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.
The following table presents the components of operating lease cost for the years ended December 31, 2025, 2024, and 2023 (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 2,808 | | | $ | 2,807 | | | $ | 3,206 | |
| Short-term lease cost | 116 | | | 101 | | | 73 | |
| Variable lease cost | 272 | | | 321 | | | 317 | |
| Total operating lease cost | $ | 3,196 | | | $ | 3,229 | | | $ | 3,596 | |
The expected maturities related to the Company’s leases with initial non-cancellable lease terms in excess of one year as of December 31, 2025 are as follows:
| | | | | |
| Year ended December 31, | Operating Lease Payments |
| 2026 | $ | 3,749 | |
| 2027 | 3,835 | |
| 2028 | 3,921 | |
| 2029 | 3,454 | |
| 2030 | 2,970 | |
| 2031 and thereafter | 6,384 | |
| Total gross operating lease payments | 24,313 | |
| Less: imputed interest | (3,916) | |
| Total operating lease liabilities, reflecting the present value of net lease payments | $ | 20,397 | |
Additional information related to operating leases is presented as follows:
| | | | | | | | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 | | 2023 |
| Weighted average remaining lease term (in years) | 6.5 | | 7.5 | | 8.4 |
| Weighted average discount rate | 5.8 | % | | 5.9 | % | | 5.9 | % |
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 3,664 | | | $ | 3,557 | | | $ | 3,121 | |
| Non-cash activities involving right-of-use assets and lease liabilities: | | | | | |
| | | | | |
| Derecognition of right-of-use assets | — | | | — | | | 4,163 | |
| Derecognition of operating lease liabilities | — | | | — | | | 5,401 | |
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.