Leases
Substantially all of our operating leases are related to office space we lease in various buildings for our own use. The terms of these non-cancelable operating leases typically require us to pay rent and a share of operating expenses and real estate taxes. We also lease equipment under both operating and finance lease arrangements. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is a lease at inception. Right-of-use ("ROU") assets represent the Company's right to control the use of the underlying assets for the lease term and lease liabilities represent the Company's obligations to make lease payments arising from the Company's portfolio of leases. Operating leases are included in Operating lease ROU assets and Current and Non-current operating lease obligation on the consolidated balance sheets. Finance lease ROU assets are included in Property and equipment, net, and the current and non-current portion of finance lease liabilities are included in Other accrued expenses and Long-term debt, respectively, on the consolidated balance sheets.
The Company has operating and finance leases for corporate offices and certain equipment. Leases have remaining lease terms ranging from one to six years. Certain leases include options to renew in increments of five years; the options to renew are not considered reasonably certain to be exercised at commencement and are not included in the lease term. Some leases have variable payments, however, because they are not based on an index or rate, they are not included in the measurement of ROU assets and operating lease liabilities. Variable payments for real estate leases relate primarily to common area maintenance, insurance and property taxes associated with the properties. These variable payments are expensed as incurred. The Company elected to not separate lease and non-lease components for building and equipment leases. The Company will account for the lease and non-lease components, such as those described above, as a single lease component. The Company elected not to apply the recognition requirements to leases with an initial term of twelve months or less ("short-term leases") and recognize lease expense for these short-term leases on a straight-line basis over the lease term.
The Company’s lease costs are recorded in Cost of services and General and administrative expenses. Short-term and finance lease expense was determined to not be material. The lease costs are as follows (in thousands):
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| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| | | | | |
| | | | | |
Operating lease cost | $ | 5,061 | | | $ | 6,747 | | | $ | 9,558 | |
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Operating cash used in operating leases | $ | 5,576 | | | $ | 5,759 | | | $ | 8,018 | |
Future lease payments under operating leases as of December 31, 2025 are as follows (in thousands):
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For the years ended December 31, | |
| 2026 | $ | 5,912 | |
| 2027 | 5,018 | |
| 2028 | 3,008 | |
| 2029 | 2,744 | |
| 2030 | 2,705 | |
| Thereafter | 5,728 | |
| Total lease payments | 25,115 | |
| Less: Interest | (4,174) | |
| Present value of lease liabilities | $ | 20,941 | |
Additional information related to the Company’s leases is as follows:
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| December 31, 2025 | | December 31, 2024 |
| Weighted-average remaining lease term | 6 years | | 4 years |
| Weighted-average discount rate | 6.5 | % | | 6.0 | % |
As of December 31, 2025 and 2024, there were no material lease transactions that we have entered into but have not yet commenced.
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.