DROPBOX, INC.DBX
DROPBOX, INC. Leases Disclosure
Leases
The Company has operating leases for corporate offices, datacenters, and finance leases for infrastructure and computer equipment. The Company’s leases have remaining lease terms of under 1 year to 11 years, some of which include options to extend the leases for up to 5 years.
The components of lease cost were as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Operating lease cost (1) | $ | 66.6 | $ | 64.4 | |||||||
| Finance lease cost: | |||||||||||
| Amortization of assets under finance lease | 89.9 | 77.9 | |||||||||
| Interest | 17.1 | 14.8 | |||||||||
| Total finance lease cost | $ | 107.0 | $ | 92.7 | |||||||
(1) Is presented gross of sublease income and includes short-term leases, which are immaterial.
Other information related to leases was as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Supplemental Cash Flow Information: | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Payments for operating leases included in cash from operating activities | $ | 83.7 | $ | 76.1 | |||||||
| Payments for finance leases included in cash from operating activities | 17.1 | 14.8 | |||||||||
| Payments for finance leases included in cash from financing activities | 128.6 | 129.4 | |||||||||
| Assets obtained in exchange for lease obligations: | |||||||||||
| Operating leases | 149.4 | 11.1 | |||||||||
| Finance leases | $ | 147.3 | $ | 171.6 | |||||||
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted Average Remaining Lease Term (in years) | |||||||||||
| Operating leases | 7.0 | 8.1 | |||||||||
| Finance leases | 2.7 | 2.8 | |||||||||
| Weighted Average Discount Rate | |||||||||||
| Operating leases | 5.0 | % | 3.8 | % | |||||||
| Finance leases | 5.3 | % | 5.5 | % | |||||||
Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows:
Operating leases(1) | Finance leases | ||||||||||
| 2026 | $ | 71.1 | $ | 161.3 | |||||||
| 2027 | 72.2 | 114.7 | |||||||||
| 2028 | 71.3 | 72.4 | |||||||||
| 2029 | 71.2 | 24.7 | |||||||||
| 2030 | 68.4 | — | |||||||||
| Thereafter | 129.0 | — | |||||||||
| Total future minimum lease payments | $ | 483.2 | $ | 373.1 | |||||||
| Less imputed interest | (76.0) | (27.3) | |||||||||
| Total liability | $ | 407.2 | $ | 345.8 | |||||||
(1) Consists of future non-cancelable minimum rental payments under operating leases for the Company’s corporate offices and datacenters where the Company has possession, excluding rent payments for short-term lease obligations, payments from the Company’s subtenants and variable operating expenses.
The Company also has subleases for several floors of its corporate offices. The Company classifies its subleases as operating leases. The subleases have remaining lease terms of under 1 year to 8 years, some of which include tenant options to extend the sublease for up to approximately 4 years. Sublease income, which is recorded as a reduction of rental expense, was $11.4 million and $14.0 million during the years ended December 31, 2025 and 2024, respectively.
Future non-cancelable rent payments from the Company's subtenants as of December 31, 2025 were as follows:
| Operating leases | |||||
| 2026 | $ | 14.0 | |||
| 2027 | 12.4 | ||||
| 2028 | 11.9 | ||||
| 2029 | 9.3 | ||||
| 2030 | 8.6 | ||||
| Thereafter | 9.7 | ||||
| Total future sublease rent payments, net | $ | 65.9 | |||
In 2017, the Company signed a 15 year lease agreement for office space in San Francisco, California, to serve as its corporate headquarters which commenced in 2018. The Company's obligations under the lease are supported by a $17.5 million letter of credit. As of December 31, 2025, the Company's remaining minimum obligation under the lease for its headquarters was $138.6 million, which excludes $162.9 million of future payments allocated to non-lease components.
In the fourth quarter of 2020, the Company moved to a Virtual First work model pursuant to which remote work has become the primary experience for all of its employees. As part of the Virtual First work model, the Company retained a portion of its office space to be used for the Company’s team collaboration use and a portion was marketed for sublease. Subsequently, every quarter, the Company has evaluated its real estate portfolio for impairment under ASC 360. As part of this analysis, the Company reassesses its real estate asset groups and estimates the fair value of the office space to be subleased using current market conditions. Where the carrying value of the individual asset groups exceeds their fair value, an impairment charge will be recognized for the difference.
The Company recorded a gain of $1.3 million during the year ended December 31, 2025, primarily resulting from a reduction of the liability for unrecoverable common area maintenance costs related to its San Francisco, California corporate headquarters due to recent sublease activity. See Note 16 "Subsequent Events" for additional information. The Company recorded total impairment charges of $0.1 million and $3.6 million during the years ended December 31, 2024 and 2023, respectively, for right-of-use and other lease related assets.
In the fourth quarter of 2023, the Company amended its San Francisco corporate headquarters lease to surrender approximately 165,000 square feet of office space in exchange for aggregate termination payments of $79.0 million, payable in three tranches through January 2025. In January 2025, the Company completed the final tranche of the lease amendment, surrendering the remaining 59,000 square feet of space and paying the remaining $36.0 million termination fee.
As a result of the lease amendment, the Company recognized a one-time gain of $158.8 million in the fourth quarter of 2023 from the corresponding remeasurement of the lease liability and adjustment of the right-of-use asset (which was previously impaired), partially offset by an increase in the liability for unrecoverable common area maintenance costs. The gain was recorded within net (gain) loss on real estate assets in the consolidated statement of operations.
As of December 31, 2025, the Company's lease liability associated with its corporate headquarters lease was $108.2 million. The liability for unrecoverable common area maintenance costs totaled $26.7 million, compared to $51.7 million as of December 31, 2024. The liability for unrecoverable common area maintenance costs is recorded within accrued and other current liabilities and other liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
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.