Note 3 - Leases
The Company has operating leases for office space, data centers and other facilities in several states and international locations. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Generally, the leases have initial terms ranging from one to nine years. Renewal options that are reasonably certain to be exercised to extend the lease terms are recognized as part of the right of use assets and lease liabilities at the lease commencement date.
The Company elected certain practical expedients under ASC 842 which allow the Company to combine lease and non-lease components of lease payments in determining right-of-use assets and related lease liabilities. The Company also elected the short-term lease exception. Leases with an initial term of twelve-months or less that do not include an option to purchase the underlying asset are not recorded on the consolidated balance sheets and are expensed on a straight-line basis over the lease term.
Components of lease cost included in general and administrative expenses on the consolidated statements of operations are as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2025 | | Year Ended December 31, 2024 | | Year Ended December 31, 2023 |
| Operating lease cost | $ | 3,276 | | | $ | 3,402 | | | $ | 3,518 | |
| Expense relating to short-term leases | 1,418 | | | 1,022 | | | 795 | |
| Variable lease costs | 21 | | | 122 | | | 115 | |
| Total lease cost | $ | 4,714 | | | $ | 4,546 | | | $ | 4,428 | |
Supplemental cash flow information related to leases is as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2025 | | Year Ended December 31, 2024 | | Year Ended December 31, 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 3,833 | | | $ | 1,213 | | | $ | 3,930 | |
| Right-of-use assets obtained in exchange for operating lease liabilities | 994 | | | — | | | — | |
During the year ended December 31, 2025 the Company entered into a new office lease in the U.S., resulting in an increase of $1.0 million in right-of-use assets and a corresponding increase in lease liabilities. The Company did not enter into any new lease agreements during the years ended December 31, 2024 or 2023.
Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):
| | | | | | | | | | | |
| December 31,
2025 | | December 31,
2024 |
| Assets: | | | |
| Right-of-use assets | $ | 10,198 | | | $ | 11,232 | |
| Liabilities: | | | |
| Accrued expenses and other current liabilities | $ | 3,960 | | | $ | 3,099 | |
| Other long-term liabilities | 6,981 | | | 9,321 | |
| Total operating lease liabilities | $ | 10,941 | | | $ | 12,420 | |
| Weighted average remaining operating lease term (years) | 3.1 | | 4.1 |
| Weighted average operating lease discount rate | 4.5 | % | | 4.3 | % |
The Company’s leases do not provide a readily determinable implicit discount rate. The Company estimates its incremental borrowing rate as the discount rate based on the information available at lease commencement. As the Company enters into operating leases in multiple jurisdictions and denominated in currencies other than the U.S. dollar, judgment is used to determine the Company’s incremental borrowing rate including (1) conversion of the subordinated borrowing rate (using published yield curves) to an unsubordinated and collateralized rate, (2) adjusting the rate to align with the term of each lease, and (3) adjusting the rate to incorporate the effects of the currency in which the lease is denominated.
Future maturities on lease liabilities as of December 31, 2025, are as follows (in thousands):
| | | | | |
| Years Ended December 31, | Future Minimum Payments |
| 2026 | $ | 4,374 | |
| 2027 | 3,971 | |
| 2028 | 3,264 | |
| 2029 | 71 | |
| 2030 | — | |
| Thereafter | — | |
| Total lease payments | 11,680 | |
| Less: imputed interest | (739) | |
| Total lease liabilities | $ | 10,941 | |
There were no leases with residual value guarantees or executed leases that had not yet commenced as of December 31, 2025 and 2024.
The Company was also a sublessor on one operating lease during the years ended December 31, 2025, 2024 and 2023. The Company recorded $0.5 million, $0.4 million and $0.6 million of sublease income in “Other expense, net” during the years ended December 31, 2025, 2024 and 2023, respectively.