Leases
We have various operating lease agreements for office space, warehouses, manufacturing, production locations, and other equipment. Our real estate leases had original lease terms of three to eleven years and remaining lease terms of two to six years. We exclude options that are not reasonably certain to be exercised from our lease terms, ranging from one to five years. Our lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms, with all other lease payments consisting of variable lease costs. For certain leases, we receive incentives from our landlords, such as rent abatements, which effectively reduce the total lease payments owed for these leases.
We did not have any financing lease arrangements as of December 31, 2025 and 2024.
The table below presents certain information related to the weighted average discount rate and weighted average remaining lease term for the Company’s leases as of December 31, 2025 and 2024:
| | | | | | | | | | | |
| 2025 | | 2024 |
| Weighted average discount rate - operating leases | 6.4 | % | | 6.3 | % |
| Weighted average remaining lease term in years - operating leases | 5.2 | | 6.2 |
The components of lease expense for the years ended December 31, 2025, 2024, and 2023 were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| (In thousands) | 2025 | | 2024 | | 2023 |
| Operating lease costs | $ | 2,323 | | | $ | 1,940 | | | $ | 1,572 | |
| Short-term lease costs | 106 | | | 51 | | | 250 | |
| Total operating lease costs | 2,429 | | | 1,991 | | | 1,822 | |
| | | | | |
| Variable lease costs | 1,099 | | | 1,103 | | | 797 | |
| Total lease expense | $ | 3,528 | | | $ | 3,094 | | | $ | 2,619 | |
Maturities of our lease liabilities as of December 31, 2025 are as follows:
| | | | | |
| (In thousands) | Operating Leases |
| 2026 | $ | 2,967 | |
| 2027 | 2,843 | |
| 2028 | 2,642 | |
| 2029 | 2,724 | |
| 2030 | 2,551 | |
| Thereafter | 1,391 | |
| Total lease payments | 15,118 | |
| Less: interest | (2,218) | |
| Total present value of lease liabilities | $ | 12,900 | |
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.