ESTABLISHMENT LABS HOLDINGS INC.ESTA
ESTABLISHMENT LABS HOLDINGS INC. Leases Disclosure
Leases
The Company recognizes lease liabilities and ROU assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term.
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatement or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset depreciates on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. The Company’s finance leases are not material.
The Company has operating leases for facilities and office spaces. Operating lease assets and the related lease liabilities are included within the ROU operating lease assets on the consolidated balance sheets. The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. The Company has operating leases for certain facilities and office spaces to be used in its operations, with remaining lease terms ranging from monthly to 6 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for additional years. These optional periods have not been considered in the determination of the ROU or lease liabilities associated with these leases as management did not consider it reasonably certain it would exercise the options.
During the years ended December 31, 2025, 2024 and 2023, the Company earned income from subleasing a warehouse facility for the remaining life of an existing master lease. The sublease agreement did not release the Company from its obligations under the master lease, and no modifications were made to the lease agreement. Income from the sublease is recognized on a straight-line basis over the term of the agreement.
The Company’s lease and sublease agreements do not contain any termination options, material residual value guarantees, material bargain purchase options or material restrictive covenants. The Company does not have any lease transactions with related parties.
Total lease cost includes the following components for the years ended December 31, 2025, 2024 and 2023:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Operating lease expense cost | $ | 2,113 | $ | 1,481 | $ | 1,079 | ||||||||||||||
| Sublease income | (311) | (311) | (233) | |||||||||||||||||
| Total lease cost, net of sublease income | $ | 1,802 | $ | 1,170 | $ | 846 | ||||||||||||||
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
Supplemental balance sheet information | ||||||||||||||
| Operating lease right-of-use assets | $ | 4,339 | $ | 5,561 | ||||||||||
| Operating lease liabilities - short-term | 1,712 | 1,514 | ||||||||||||
| Operating lease liabilities - long-term | 2,820 | 4,203 | ||||||||||||
| Total operating lease liabilities | $ | 4,532 | $ | 5,717 | ||||||||||
Weighted-average remaining lease term (years) | ||||||||||||||
Operating leases | 2.7 | 3.4 | ||||||||||||
Weighted-average discount rate (%) | ||||||||||||||
| Operating leases | 11.2 | % | 11.1 | % | ||||||||||
Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||
| Operating cash outflows from operating leases | $ | 2,117 | $ | 1,384 | $ | 1,052 | ||||||||||||||
| Operating cash inflows from subleases | (332) | (320) | (214) | |||||||||||||||||
| Operating cash outflows from operating leases, net of sublease income | $ | 1,785 | $ | 1,064 | $ | 838 | ||||||||||||||
| ROU assets obtained in exchange for new lease liabilities | ||||||||||||||||||||
| Operating leases | $ | 335 | $ | 3,115 | $ | 478 | ||||||||||||||
Maturities of lease liabilities as of December 31, 2025 were as follows:
| Years Ending December 31, | Operating Leases | |||||||
| (in thousands) | ||||||||
2026 | $ | 2,097 | ||||||
| 2027 | 1,807 | |||||||
| 2028 | 948 | |||||||
| 2029 | 459 | |||||||
| 2030 | 86 | |||||||
| Thereafter | 37 | |||||||
| Total future minimum lease payments | 5,434 | |||||||
| Less: Amount of lease payments representing interest | (902) | |||||||
| Present value of future minimum lease payments | $ | 4,532 | ||||||
The undiscounted future cash receipts from the Company’s sublease as of December 31, 2025 were as follows:
| Years Ending December 31, | Sublease | ||||||||||
| (in thousands) | |||||||||||
2026 | $ | 343 | |||||||||
| 2027 | 355 | ||||||||||
| 2028 | 368 | ||||||||||
| 2029 | 316 | ||||||||||
| Thereafter | — | ||||||||||
Total undiscounted future sublease cash receipts | $ | 1,382 | |||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 4, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 15, 2021 | |
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.