We lease certain machinery and plant equipment, office space, and production and warehouse facilities under non-cancelable operating leases that expire on various dates through 2037. Our finance leases primarily relate to machinery and plant equipment. Over the past three years, we continually assessed our leased real estate footprint as a facet of our evolving remote-first operating model for many of our employees, which resulted in a decrease to our leased real estate portfolio over this period of time.
The following table presents the classification of right-of-use assets and lease liabilities as of June 30, 2025 and 2024.
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| Leases | | Consolidated Balance Sheet Classification | | June 30, 2025 | | June 30, 2024 |
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| Assets: | | | | | | |
| Operating right-of-use assets | | Operating lease assets, net | | $ | 83,951 | | | $ | 78,681 | |
| Finance right-of-use assets | | Property, plant, and equipment, net | | 30,345 | | | 26,025 | |
| Total lease assets | | | | $ | 114,296 | | | $ | 104,706 | |
| Liabilities: | | | | | | |
| Current: | | | | | | |
| Operating lease liabilities | | Operating lease liabilities, current | | $ | 22,064 | | | $ | 19,634 | |
| Finance lease liabilities | | Other current liabilities | | 9,121 | | | 8,323 | |
| Non-current: | | | | | | |
| Operating lease liabilities | | Operating lease liabilities, non-current | | 66,196 | | | 61,895 | |
| Finance lease liabilities | | Other liabilities | | 24,501 | | | 28,037 | |
| Total lease liabilities | | | | $ | 121,882 | | | $ | 117,889 | |
The following table represents the lease expenses for the years ended June 30, 2025, 2024, and 2023:
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| | Year Ended June 30, |
| | 2025 | | 2024 | | 2023 |
| Operating lease expense | | $ | 25,648 | | | $ | 25,844 | | | $ | 30,240 | |
| Finance lease expense: | | | | | | |
| Amortization of finance lease assets | | 5,791 | | | 5,300 | | | 4,565 | |
| Interest on lease liabilities | | 221 | | | 226 | | | 205 | |
| Variable lease expense | | 6,181 | | | 5,614 | | | 6,821 | |
| Less: sublease income | | (951) | | | (904) | | | (833) | |
| Net operating and finance lease cost | | $ | 36,890 | | | $ | 36,080 | | | $ | 40,998 | |
Future minimum lease payments under non-cancelable leases as of June 30, 2025 were as follows:
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| Payments Due by Period | | Operating lease obligations | | Finance lease obligations | | Total lease obligations |
| Less than 1 year | | $ | 26,245 | | | $ | 10,332 | | | $ | 36,577 | |
| 2 years | | 20,870 | | | 7,696 | | | 28,566 | |
| 3 years | | 16,661 | | | 5,155 | | | 21,816 | |
| 4 years | | 12,456 | | | 4,307 | | | 16,763 | |
| 5 years | | 8,282 | | | 3,114 | | | 11,396 | |
| Thereafter | | 18,877 | | | 10,782 | | | 29,659 | |
| Total | | 103,391 | | | 41,386 | | | 144,777 | |
| Less: present value discount | | (15,131) | | | (7,764) | | | (22,895) | |
| Lease liability | | $ | 88,260 | | | $ | 33,622 | | | $ | 121,882 | |
Our leases have remaining lease terms of 1 year to 15 years, inclusive of renewal or termination options that we are reasonably certain to exercise.
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| | Year Ended June 30, |
| Supplemental Cash Flow Information | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in measurement of lease liabilities: | | | | | | |
| Operating cash flows from operating leases | | $ | 24,956 | | | $ | 25,015 | | | $ | 31,161 | |
| Operating cash flows from finance leases | | 221 | | | 226 | | | 205 | |
| Financing cash flows from finance leases | | 7,833 | | | 10,140 | | | 8,290 | |
Other information about leases is as follows:
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| Lease Term and Discount Rate | | June 30, 2025 | | June 30, 2024 |
| Weighted-average remaining lease term (years): | | | | |
| Operating leases | | 5.72 | | 5.90 |
| Finance leases | | 7.19 | | 7.96 |
| Weighted-average discount rate: | | | | |
| Operating leases | | 6.09 | % | | 5.70 | % |
| Finance leases | | 7.49 | % | | 7.04 | % |
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.