Leases
Our operating lease, right-of-use assets relate to real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for our corporate headquarters located in Livermore, California. Our leases have remaining terms of one to nine, and some leases include options to extend up to twenty years. We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time. The weighted-average remaining lease term for our operating leases was three years at December 27, 2025 and the weighted-average discount rate was 4.99%.
The components of lease expense were as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Lease Expense |
| December 27, 2025 | | December 28, 2024 | | December 30, 2023 |
| Operating lease expense | $ | 8,577 | | | $ | 8,457 | | | $ | 8,453 | |
| Short-term lease expense | 531 | | | 341 | | | 524 | |
| Variable lease expense | 3,310 | | | 4,194 | | | 2,389 | |
| $ | 12,418 | | | $ | 12,992 | | | $ | 11,366 | |
Future minimum payments under our non-cancelable operating leases were as follows as of December 27, 2025 (in thousands):
| | | | | | | | |
| Fiscal Year | | Amount |
| 2026 | | $ | 8,926 | |
| 2027 | | 8,421 | |
| 2028 | | 4,736 | |
| 2029 | | 510 | |
| 2030 | | 461 | |
| Thereafter | | 993 | |
| Total minimum lease payments | | 24,047 | |
| Less: interest | | (3,897) | |
| Present value of net minimum lease payments | | 20,150 | |
| Less: current portion | | (7,662) | |
| Total long-term operating lease liabilities | | $ | 12,488 | |
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.