Five9, Inc.FIVN
Five9, Inc. Leases Disclosure
Leases
The Company has leases for offices, data centers and computer and networking equipment that expire at various dates through 2031. The Company’s leases have remaining terms of to seven years, some of the leases include a Company option to extend the leases for up to to five years, and some of the leases include the option to terminate the leases upon 30-days’ notice. The Company does not separate lease and non-lease components for real estate operating leases.
As the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. Operating leases with a duration of 12 months or less are excluded from right-of-use assets and operating lease liabilities, and related lease payments are generally recognized on a straight-line basis over the lease term and variable lease payments are recognized as incurred.
The Company entered into three-year equipment finance lease agreements and recognized $18.6 million right of use assets during 2024, which were reported within Finance lease right-of-use assets on the consolidated balance sheets and are being depreciated on a straight-line basis over the lease term. As a result, the Company also recognized short-term lease liabilities of $5.9 million within Finance lease liabilities and long-term lease liabilities of $12.7 million within Finance lease liabilities - less current portion on the consolidated balance sheets for the year ended December 31, 2024. The Company also entered into additional three-year equipment finance lease agreements and recognized $3.9 million right of use assets during 2025, which were reported within Finance lease right-of-use assets and are being depreciated on a straight-line basis over the lease term. As a result, the Company also recognized short-term lease liabilities of $1.3 million within Finance lease liabilities and long-term lease liabilities of $2.6 million within Finance lease liabilities - less current portion for the year ended December 31, 2025.
The components of lease expenses were as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Operating lease cost | $ | 12,974 | $ | 13,270 | $ | 13,544 | ||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of right-of-use assets | $ | 8,911 | $ | 3,857 | $ | 940 | ||||||||||||||
| Interest on finance lease liabilities | 1,033 | 552 | 155 | |||||||||||||||||
| Total finance lease cost | $ | 9,944 | $ | 4,409 | $ | 1,095 | ||||||||||||||
Supplemental cash flow information related to leases was as follows (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
| Operating cash used in operating leases | $ | (12,130) | $ | (12,259) | $ | (10,966) | ||||||||||||||
| Financing cash used in finance leases | (9,770) | (4,012) | (989) | |||||||||||||||||
| Right of use assets obtained in exchange for lease obligations: | ||||||||||||||||||||
| Operating leases | 19,121 | 9,448 | 6,454 | |||||||||||||||||
| Finance leases | 3,853 | 18,559 | 5,505 | |||||||||||||||||
Supplemental balance sheet information related to leases was as follows (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Operating leases | ||||||||||||||
| Operating lease right-of-use assets | $ | 46,375 | $ | 38,880 | ||||||||||
| Operating lease liabilities | $ | 12,922 | $ | 11,258 | ||||||||||
| Operating lease liabilities — less current portion | 42,116 | 37,071 | ||||||||||||
| Total operating lease liabilities | $ | 55,038 | $ | 48,329 | ||||||||||
| Finance leases | ||||||||||||||
| Finance lease right-of-use assets | $ | 14,216 | $ | 19,269 | ||||||||||
| Property and equipment, gross | $ | 14,354 | $ | 21,708 | ||||||||||
| Less: accumulated depreciation and amortization | (14,354) | (21,708) | ||||||||||||
| $ | — | $ | — | |||||||||||
| Finance lease liabilities | $ | 8,480 | $ | 7,768 | ||||||||||
| Finance lease liabilities — less current portion | 6,090 | 11,688 | ||||||||||||
| Total finance lease liabilities | $ | 14,570 | $ | 19,456 | ||||||||||
During 2024, the Company recognized a $1.9 million impairment loss as a result of its commitment to close two operating lease facilities and a $0.3 million impairment loss related to the associated leasehold improvements and property and equipment.
Weighted average remaining terms were as follows (in years):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted average remaining lease term | ||||||||||||||
| Operating leases | 4.6 years | 5.0 years | ||||||||||||
| Finance leases | 1.7 years | 2.5 years | ||||||||||||
Weighted average discount rates were as follows:
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted average discount rate | ||||||||||||||
| Operating leases | 4.7 | % | 4.2 | % | ||||||||||
| Finance leases | 5.8 | % | 5.8 | % | ||||||||||
Maturities of lease liabilities were as follows (in thousands):
| Year Ending December 31, | Operating Leases | Finance Leases | ||||||||||||
| 2026 | $ | 15,092 | $ | 9,050 | ||||||||||
| 2027 | 12,520 | 5,906 | ||||||||||||
| 2028 | 10,851 | 319 | ||||||||||||
| 2029 | 10,602 | — | ||||||||||||
| 2030 | 10,262 | — | ||||||||||||
| Thereafter | 1,669 | — | ||||||||||||
| Total future minimum lease payments | 60,996 | 15,275 | ||||||||||||
| Less: imputed interest | (5,958) | (705) | ||||||||||||
| Total | $ | 55,038 | $ | 14,570 | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 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.